IndustryWeek's curated collection of semiconductor news
The last six months have seen a blur of domestic investment in new semiconductor factories—but the private sector urgently needs a push to keep the U.S. competitive. That’s according to the U.S. Commerce Department, which released findings from its inquiry on semiconductor supplies January 25. The formal request confirmed that the supply of semiconductors in the U.S. is at a critical low point, and echoed manufacturers like Intel in calling on Congress to fund support for U.S.-made computer chips.
The Commerce Department’s formal Request for Information or RFI on chips was issued September 2021 and ultimately collected 150 responses from various parts of the semiconductor supply chain. The results showed that demand for chips is 17% higher in 2021 than it was two years ago, but without a commensurate increase in supply.
A majority of chip factories, or fabricators, are running at or above 90% capacity utilization to try and keep up, but inventories are still falling. Compared to 40 days supply in 2019, the median semiconductor consumer in 2021 now only has about 5 days’ worth of chips on hand at a time.
Specific chips that are particularly hard-hit include legacy logic chips, the kind used in automotive and medical device manufacturing. Shortages of logic chips have led almost all major automakers to slow or delay production of their vehicles this year or last.
Gina Raimondo, secretary of the Commerce Department, sounded the alarm in a statement attending the RFI results, and called on the legislative branch to subsidize domestic production.
“The semiconductor supply chain remains fragile, and it is essential that Congress pass chips funding as soon as possible,” she said. “With sky-rocketing demand and full utilization of existing manufacturing facilities, it’s clear the only solution to solve this crisis in the long-term is to rebuild our domestic manufacturing capabilities.”
While the CHIPS Act, which would include $52 billion in incentives for domestic chip production, passed the Senate last June with bipartisan support, it still has yet to pass the House of Representatives. According to Reuters, House Speaker Nancy Pelosi informed party colleagues late last week that the bill would appear in the House soon.
The report landed just a few days after Intel Co. revealed its own plans for a $20 billion semiconductor manufacturing campus outside Columbus, Ohio. While Intel’s first stage of developing the campus will include two fabricators or fabs, the company has said the site could include up to eight—potentially contingent on federal support.
Speaking to IndustryWeek’s Editor-in-Chief Robert Schoenberger after the company’s announcement, Intel’s Chief of Manufacturing Keyvan Esfajani said Intel plans to expand the new campus regardless of if CHIPS passes or not, though if funding falls through the expansion “might be slower, and the size isn’t going to be as big.”
“Our plan, when we have a site of this scale, is we’re going to keep going. What the CHIPS Act will do, it will accelerate expansion,” Esfajani said.
And Intel is not alone in getting out ahead of the act to start shoring up domestic production. According to the Semiconductor Industry Association, chipmakers have announced more than $80 billion in new investments since the beginning of 2021. Aside from Intel’s $20 billion campus, that includes $30 billion in new investments by Texas Instruments; a new $17 billion Samsung factory, also in Texas; a new GlobalFoundries fab in New York state; and Cree’s $1 billion expansion of an existing North Carolina plant.
