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America’s Vital Chip Mission

This year’s semiconductor shortages underscore the need for a comprehensive strategy to maintain a reliable supply of components that are now indispensable to both the economy and national security. A successful strategy will have four main components.

BERKELEY – Semiconductors are an essential product. They are the foundation of everything from sophisticated weapons systems and critical infrastructure to a growing number of technologies used daily by consumers and businesses. Scarcities are thus felt widely, and the current semiconductor shortage has exposed gaps and vulnerabilities across the global supply system.

Today’s semiconductor shortage reflects a variety of factors – including significant pandemic-driven disruptions in both demand and supply and unilateral US trade restrictions with China. And any number of causes could trigger future shortages. For the sake of both national and economic security, the United States needs a multifaceted strategy for providing a competitive, resilient, secure, and sustainable (CRSS) supply of semiconductors. Such a strategy must address all parts of the industry, from design, fabrication, assembly, and packaging to materials and manufacturing equipment.

Each of these elements of the supply chain is critical. Competitive market conditions must prevail throughout the industry, because excessive market power in any one segment can jeopardize supply. The system must also be resilient to shocks like fires, droughts, earthquakes, and geopolitical tensions and upheavals. And it must be secure in two senses: the US must maintain reliable access to cutting-edge chips and the means of producing them, and chip supplies need to be protected from threats like counterfeiting, theft, cyberattacks, and espionage. Finally, the supply must be sustainable, accounting for the significant environmental and energy costs of chip production.

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