The US defense industrial base is weaning itself away from Chinese production of semiconductors and microelectronics. On Dec. 6, President Joe Biden visited the new Taiwan Semiconductor Manufacturing Company (TSMC) tool-in ceremony in Phoenix, AZ. TSMC committed to building the plant in 2020 as part of former President Donald Trump’s onshoring initiative to increase domestic manufacturing of critical microelectronics infrastructure. The company’s fabrication facility, which will begin commercial operations in 2024, can provide as many as 10,000 highly skilled, high-paying jobs in the western United States.
Following the obligatory backslapping and introductions, Biden recognized TSMC Chairman Mark Liu, Arizona Gov. Doug Ducey, Apple CEO Tim Cook, and Micron Technologies CEO Sanjay Mehrotra. Referring to Cook, Biden quipped: “He buys a few of these little chips … ah, and he’s a small customer here at this outfit, between 25 and 35% of their … but anyway. And Sanjay of Micron, Sanjay has represented more than two dozen tech and manufacturing companies, and you’re seeing what we are all seeing, American manufacturing is back, folks.” While explaining that the plant would be turning out cutting-edge three nanometer-sized chips, the most advanced made in the United States, Biden got a little tongue-tied, but the meaning came across. The White House’s support of the bipartisan CHIPS Act legislation with the potential for as much as $58 billion in future technology investment is a boon for the administration’s struggling economy.
Resurgence of Semiconductors Is at Hand
“The visit by a president to a foreign company’s factory reflects the US reliance on TSMC to give American chip manufacturing a lift. The US makes about 12% of the world’s chips compared with 37% three decades ago, according to the U.S.-based Semiconductor Industry Association,” Jang Jie explained in The Wall Street Journal. Building a semiconductors factory is no trivial undertaking; construction cost is estimated at $12 billion. The commander-in-chief’s visit gave him the opportunity to announce a second semiconductor plant to be built in the Phoenix area, eventually representing a $40 billion investment in US chip-making by the Taiwanese company. However, for the Pentagon, the TSMC manufacturing facilities can help eliminate counterfeit chips and overseas supply chain disruptions.
From a national security perspective, each precision-guidance weapon, tactical vehicle, and piece of combat equipment runs on electronic chips and microelectronics, a dependence that only promises to grow. Biden’s appearance at TSMC’s door-opening underscored the importance of having a chip fabricator located domestically.
Domestic Semiconductor Fabrication Adds Security
Recently, the deliveries of the fifth-generation ground attack fighter, the F-35, were halted when Honeywell notified the government of its concerns about the origin of one of its parts. It had been made using materials from China against the US government rules. As Defense News reported:
“But the high-profile incident spotlighted a quandary for Pentagon leaders, one the department has struggled to address and was warned about for more than a decade: how to keep counterfeit parts and other unauthorized material from sneaking into the department’s sprawling supply chain. It’s a problem Pentagon officials worry could lead, in a best-case scenario, to poorer equipment performance — or in a worst-case scenario, to the accidental death of troops.”
Having domestic production of microchips, microelectronics, and components will build a semiconductor industrial base to satisfy the nearly insatiable appetite for producing new weapon systems as well as sustaining legacy electronic components on weapons still in the operational inventory. Domestic production also ensures development, fabrication, packaging, testing, and transportation security.
America was among the first to invent microchips and create cutting-edge technologies that put semiconductors in everything from microwave ovens to Teslas and F-35 fighters. Continuing the Trump administration’s drive to bring more of the semiconductor industry back to its roots, the Biden team is taking advantage of bipartisan legislation to support the effort. The TSMC fabrication plants in Arizona herald the resurgence of US domestic microchip production. This positive development in the US high-tech industrial base will benefit national security.
The views expressed are those of the author and not of any other affiliation.
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