How the chip shortage can help high-tech manufacturing in the US

Manufacturers have not been able to overcome semiconductor shortages worldwide. Gaming consoles like the PlayStation 5 nihit pa, automakers deliver cars with missing parts, and Apple could end up making 10 million smaller iPhones in 2021. For some companies, however, these supply chain problems may have an unexpected increase.

Delays in overseas manufacturing and the relentless demand for consumer electronics have become a windfall for some chipmakers in the United States. Even lesser -known American manufacturers with older or second -hand equipment have seen a surge in sales for the legacy chips, or microcontrollers, they make. These features are not expensive to make however a critical component for many devices, and as supply chain disruptions have affected large companies focusing on more advanced technologies, the demand for more basic chips has grown. Flushing with customers, the companies that make these microcontrollers are now spending to increase their overall manufacturing capacity.

An Arizona-based semiconductor supplier, Microchip Technology, has invested in expensive new equipment and hired more staff as its revenue tripled in the last quarter, according to the New York Times. GlobalFoundries, a chipmaker based in Malta, New York, announced in July that it build another chip plant close to the desire to double production capabilities. And last month, a North Carolina manufacturer announced its pivot to the semiconductor and changed its name from Cree to Wolfspeed. The company also the process of building a new manufacturing facility in upstate New York. The GM is already there signed as a strategic customer, another clear indication that the chip supply crunch has benefited some U.S. vendors and opened up access to new customers.

Together, these developments point to a trend that industry leaders hope will be a renaissance for U.S. chip making. Last May, Texas Instruments began construction on a $ 3.1 billion chip plant near its headquarters in Dallas and plans can be finalized for another facility soon. Intel announced last March that it would spend more than $ 20 billion to build two new chip manufacturing factory in Arizona, and the company says it could create more than 3,000 jobs. The world’s largest chipmaker, Taiwan -based TSMC, has already begun construction a $ 12 billion plant in Arizona. Today, local economic leaders born in other companies working with TSMC to also start operations there.

“We just want to make sure that more manufacturing facilities are built in the future, that more of them are built here,” John Neuffer, CEO of the Semiconductor Industry Association, told Recode. “It’s about making sure that, going forward, we have a more balanced supply chain.”

The U.S. government wants to capitalize on this momentum. President Joe Biden is excited to strengthen the strength of the country’s chip supply, which government officials believe is critical to national security. At the same time, politicians on both sides of the aisle are excited about the development of high-tech manufacturing in the U.S., which has declined over the past few decades after many companies chose to build new factories. abroad.

Whether a new wave of chip manufacturing will help the U.S. expand its role as a global high-tech manufacturing center is unclear. Despite the Biden administration EFFORTS to address the chip shortage, chipmakers in the US and abroad have motioned that, in the absence of direct financial incentives, they would send their new manufacture elsewhere in the future. Even Idaho -based Micron Technology, the last major manufacturer of semiconductors for the computer memory left in the US, says the future of its domestic production depending on financial incentives. The company plans to spend more than $ 150 billion on research and chip development over the next decade, but clarified that it will build new plants overseas otherwise it will not receive proper support from the US government.

These companies want Congress to approve $ 52 billion in funding to increase incentives for domestic chip manufacturing and assistance. companies buy a lot of manufacturing equipment. These subsidies could be critical to prevent the U.S. share of global chip manufacturing from declining further. Currently, only 12 percent of world chip production occurs in the U.S., a significant decline from 37 percent share to chip making happened in the U.S. in 1990. While Republican and Democratic leaders say they are excited to support high-tech manufacturing, chip industry leaders say the government has not yet can provide the same financial incentives as other countries, including China and Japan, which also increased their chip production.

Time is of the essence. Today, companies are racing to build facilities around the world that will make chips for future technologies, including 5G devices and electric vehicles. Once these billion-dollar facilities start production, they are unlikely to get up and running.

This story was first published in the Recode newsletter. Sign up here so you don’t miss the next one!

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