Why Microelectronics Will Drive the Future of Manufacturing

Microelectronics has emerged as a critical driver of domestic manufacturing in the United States. As the nation seeks to strengthen its position as a manufacturing powerhouse, the significance of producing microelectronic components domestically is getting more attention. This shift is underscored by a substantial Department of Defense grant, demonstrating the federal government’s recognition of the importance of microelectronics production. The message is clear: Microelectronic manufacturing is the future, and the time to focus is now.

The road to reshoring

Long before COVID-era semiconductor supply chain shortages hit American producers, the Defense Advanced Research Projects Agency (DARPA) was addressing technological barriers affecting both commercial industries and national security. Why was a proactive approach needed? Over the past three decades, the U.S. has seen its global microchip production share drop dramatically from 37% to almost 12%.

Today, Taiwan dominates the production of advanced semiconductors, and China exports a significant portion of its microchips to the U.S. These chips power everything from smartphones and automobiles to advanced fighter jets like the F-35. Needless to say, the economy is heavily dependent on them, which means it’s also at the mercy of foreign producers.

A forward-looking approach

DARPA has a track record of anticipating future challenges, often looking 10 to 15 years ahead. In 2017, it launched the Electronics Resurgence Initiative (ERI), committing more than $1.5 billion over five years to overcome key technological obstacles in microelectronics research and development. ERI 2.0, which was initiated last year, emphasizes cutting-edge manufacturing opportunities and extreme environment electronics, with an additional $3 billion earmarked for these efforts over the next five years.

Recognizing the urgency

Recognizing the urgency of addressing microelectronics supply chain vulnerabilities, Congress passed the $52 billion Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act in the summer of 2022. This comprehensive measure supports workforce improvements, research and development, and manufacturing in the semiconductor industry. It also offers a 25% tax credit for investments in domestic manufacturing facilities and equipment.

Since the passage of the CHIPS Act, companies have announced more than $166 billion in semiconductor and microelectronics manufacturing investments. The Commerce Department also established the National Semiconductor Technology Center, fostering innovation in semiconductor technology. Meanwhile, the Defense Department — granted $2 billion under the CHIPS Act — has selected regional hubs for its Microelectronics Commons aimed at commercializing domestic microelectronics research.

Support for microelectronics manufacturing

In line with the CHIPS and Science Act, the Department of Defense has allocated $238.3 million across eight U.S. locations for the development of microelectronics manufacturing hubs. The regional hubs span across the nation and are identified as:

The Northeast Microelectronics Coalition Hub
Silicon Crossroads Microelectronics Commons Hub
California Defense Ready Electronics and Microdevices Hub
Commercial Leap Ahead for Wide Bandgap Semiconductors Hub
Southwest Advanced Prototyping Hub
Midwest Microelectronics Consortium Hub
Northeast Regional Defense Technology Hub
California-Pacific-Northwest AI Hardware Hub

These hubs will receive $2 billion over the next five years and focus on different areas, including electromagnetic warfare, secure computing, the internet of things (IoT), artificial intelligence (AI) hardware, 5G, 6G, and quantum technology.

Microelectronics will drive domestic manufacturing

With DARPA and government initiatives at the forefront of reshaping the industry, the U.S. is reclaiming its position as a global leader in microelectronics, ensuring a robust supply chain and maintaining national security in the process. The future holds promise for a thriving domestic microelectronics industry, powering a wide range of technologies and fortifying the nation’s industrial base.

Delicate manufacturing environments require a precision approach to equipment repair and maintenance. You can always count on the professionals at Global Electronic Services. Contact us for all your industrial electronic, servo motor, AC and DC motor, hydraulic, and pneumatic needs — and don’t forget to like and follow us on Facebook!