Small to big, semi makers push for U.S.-based chip production

semi worker
(SIA) SkyWater Technology and Intel have made separate strong appeals for boosting U.S. production of chips to reverse a 30 year decline in chip superiority. (Semiconductor Industry Association)

A broad array of U.S.-based semiconductor companies have revved up support for federal steps to prop up domestic semi manufacturing. 

The signs are emerging everywhere from trade groups such as the Semiconductor Industry Association to semi giant Intel and other smaller entities.   Their over-arching message: domestic production protects national security interests and jobs.

In one recent example, SkyWater Technology of Bloomington, Minnesota, held a ribbon-cutting ceremony on Oct. 12 to celebrate an expansion of its manufacturing facility supported by a Department of Defense investment of up to $170 million.  The expansion will support microelectronics manufacturing for the radiation hardened market needed for space and medical imaging.

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The company considers itself the only solely U.S.-owned pure-play chip foundry and plans to launch its first Early Access Program for multi-project wafer shuttles by year’s end. The expansion will also allow SkyWater to add copper interconnect process technology for mixed-signal device capabilities.

In a recent statement, the company took the opportunity to note the “disparity between the U.S. dominance in technology innovation and lagging role of semiconductor manufacturing” which has been heightened with supply chain problems with the pandemic and trade disputes between China and the U.S.

 SkyWater is a DoD-accredited Trust supplier and has about 450 employees with $108 million in 2020 annual revenues, according to Dunn and Bradstreet.  In May, it announced it was producing a wireless chip for use in a circular adhesive patch to be used in temperature sensing to aid in COVID-19 detection. The company produces a wide array of integrated circuits used by other companies in producing products.

RELATED: COVID-19 temp patch for under $5 coming soon

More recently, SkyWater said it entered into a non-binding agreement to explore taking over the lease of a semiconductor factory in Florida devoted to making microelectronics and advanced chip packaging through a public-private partnership. In a statement, the company noted that chip packaging is currently outsourced mainly to plants in Asia. “By offering advanced packaging capabilities domestically, SkyWater Technology can enable tighter supply chain management and deliver increased security and faster to market for customers,” the company said in a statement.

SkyWater CEO Thomas Sonderman has emerged as a domestic chip production champion.  With the potential Florida deal, he said his company’s objective is to play a “significant role in re-domesticating and optimizing technology manufacturing and supply chain management.”

One of the most sweeping statements of support of domestic semiconductor manufacturing has come from Intel, the world’s largest semiconductor manufacturer with $71 billion in 2019 revenues.

In an editorial posted Oct. 2, Intel Chief of Government Affairs Jeff Rittener noted that 80% of the world’s semiconductor manufacturing capacity is now in Asia.  “The U.S. risks falling behind in an industry it once dominated and that its economy and national security depend upon,” he said.  

Calling itself the “sole U.S.-based advanced semiconductor manufacturer,” he said Intel is committed to industry leadership and its partnership with the U.S. government on projects with Sandia National Labs and work on an exascale supercomputer at Argonne National Lab. “A reliable, secure, domestic source of leading-edge semiconductors remains critical to our country,” he said.

Intel was also recently awarded the second phase of a State-of-the-Art Heterogenous Integration Packaging (SHIP) prototype program as well, bringing the total DOD awards to more than $156 million.

RELATED: Defense awards for Intel SHIP project now top $156M

Rittener cited a September study by the SIA trade group and Boston Consulting Group that found a federal government program of grants and tax incentives for new semi fabs would help reverse the decline in U.S. semiconductor manufacturing over the last 30 years.

Rittener didn’t come out in support of any particular set of congressional initiatives for tax incentives to back semiconductor manufacturing in his latest editorial, preferring to make a broader appeal about the importance of the industry. Back in July in a separate editorial he urged restoring funds in the National Defense Authorization Act and called for an investment tax credit in legislation known as the CHIPS for America Act. The CHIPS act is now in House and Senate committees where it is likely to remain until next year.

RELATED: Chip lobby opposes tariffs, urges bills for tax credits and funding to boost manufacturing

RELATED: R&D tax support in U.S. is one-third what China offers its companies

“Now more than ever, we—in partnership with others in our industry, government and academia—need to continue to invest in U.S. manufacturing, local economic growth, sustainability and training for the next generation of talent,” Rottener concluded in the latest editorial. “America’s technology leadership is on the line.”

SkyWater Technology Vice President of Strategy Marketing Ross Miller will appear on a virtual panel, “Innovative Sensing Technology Waging War on a Virus” on Monday at Noon EST as part of Fierce Medtech Innovation Week.  Register online for the free event.

 

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