Amid high demand for microchips, there is a new, national effort to chart the future of the U.S. semiconductor industry — and it runs right through Arizona.
The National Semiconductor Economic Roadmap, known as NSER (pronounced like “answer”), launched on September 28, 2021, with a mission to “boost U.S. semiconductor competitiveness through a focus on the workforce, supply chain and infrastructure.” The initiative aims to advance U.S. technological leadership in the semiconductor arena while attracting more high-tech chip factories and jobs to U.S. shores.
Contributing to the effort are dozens of representatives from industry-leading companies, trade associations, higher education and state economic development agencies. The process is designed to be industry-led, with virtually every stage of semiconductor production represented — design, equipment and materials, manufacturing, packaging, supply chain and end users.
Key Arizona manufacturers are also taking part, including Intel, Taiwan Semiconductor Manufacturing Company (TSMC), Microchip, NXP and onsemi.
“Today more than ever, we see the strategic importance of a robust U.S. semiconductor industry,” said Pat Gelsinger, CEO of Intel. “Fostering deeper partnerships with our research institutions, universities, defense institutions, state leaders and more will be critical to our long-term economic and national security, and we are pleased to join this worthwhile effort.”
In addition to a broad representation of industry stakeholders, what separates NSER from past semiconductor roadmaps is the added perspective of state economic development leaders.
“As Arizona’s experience has shown, states are on the front lines of semiconductor investment and attraction,” said Sandra Watson, president and CEO of the Arizona Commerce Authority. “We’re proud to help lead this historic effort alongside our state and industry partners to develop a shared vision, one that can help drive American semiconductor leadership for decades to come.”
All-important “brains” of modern electronics
Semiconductors, also known as microchips, got their birth in the United States in 1947 and quickly revolutionized the field of electronics. Today, they could be thought of as the brains or nerve centers of our devices, powering everyday products like washer and dryers, TVs, and smartphones as well as emerging technologies such as electric vehicles and artificial intelligence systems.
Supply chain shakeups caused by the pandemic spiked demand for the tiny, highly advanced electrical components, centering the industry in the public eye. The increased attention has emphasized the critical nature of semiconductors for national priorities like economic stability and defense.
And while short-term shortages are grabbing headlines now, it’s long-term trends that worry many industry-watchers.
In 1990, the United States manufactured nearly 40% of the world’s semiconductors. Today, that share is down to 12%. In contrast, nearly 80% of semiconductor manufacturing facilities, known as “fabs,” are concentrated in Asia. Of the six new fabs completed in 2019, none are in the U.S. Four opened in China, however, where the government is heavily subsidizing their construction. Analysts project China will continue to increase its share of fabs and the suppliers that power them, eventually representing the largest share of semiconductor manufacturing in the world by 2030.
Arizona is a natural fit to facilitate the forward-looking road-mapping effort. As far back as the 1950s, Motorola was developing groundbreaking transistors at its research and development lab in Phoenix. Motorola’s operations would later expand to three manufacturing sites across the metro area.
In 1980, Intel launched its Fab 6 and Assembly Test facility in Chandler. Among Intel’s four fabs currently in the state is Fab 42, the company’s largest chipmaking factory in the U.S. and one of the most advanced in the world.
Intel announced the addition of two more fabs to its Ocotillo Campus in March, a $20 billion investment that will create at least 3,000 direct, high-tech jobs. In May 2020, TSMC announced Phoenix as the location of its new $12 billion fab, creating a projected 2,000 new jobs.
More than 200 semiconductor manufacturing establishments currently employ more than 22,000 people in the state, placing Arizona in the top five in the nation for semiconductor employment.*
Following NSER’s launch, the initiative’s first meeting took place at the Arizona Commerce Authority in late October with more than 50 participating partners attending in person or virtually, including representatives from eight states. The inaugural working session emphasized NSER’s focus areas while allowing participants to come together around a set of common goals and ideas.
Over the coming months, participating NSER partners will convene regularly to identify precompetitive technical challenges and opportunities, infrastructure and supply chain issues, workforce skill requirements and more.
With significant implications for American technological, economic and national security leadership, there may be no more crucial time to develop a national, industry-led semiconductor strategy.
To find out more information or become a NSER partner, click here