Strategies to Enable Assured Access to Semiconductors for the Department of Defense (2024)
Chapter: 1 Introduction
1
Introduction
STUDY BACKGROUND AND STATEMENT OF TASK
The study of the Committee on Global Microelectronics: Models for the Department of Defense in Semiconductor Public–Private Partnerships is a congressionally mandated request authorized in Section 9903(a)(6)(C) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (NDAA FY 2021) for the Department of Defense (DoD) to make recommendations and provide policy options for optimal public–private partnerships (PPPs) and partnership activities. The study was developed jointly between the National Academies of Sciences, Engineering, and Medicine and DoD’s Office of the Under Secretary of Defense for Research and Engineering Microelectronics Office in response to the mandate in Section 9903(a)(6)(C) of NDAA FY 2021. The section states that
In conjunction with the activities carried out under this section, the Secretary of Defense shall enter into an agreement with the National Academies of Sciences, Engineering, and Medicine to undertake a study to make recommendations and provide policy options for optimal public–private partnerships and partnership activities, including an analysis of establishing a semiconductor manufacturing corporation to leverage private sector technical, managerial, and investment expertise, and private capital, as well as an assessment of and response to the industrial policies of other nations to support industries in similar critical technology sectors, and deliver such study to the congressional defense committees not later than October 1, 2022.
Pursuant this, DoD asked the National Academies to convene a consensus study committee to identify, explore, and assess PPP models that have the potential to ensure access for the production of semiconductors in the United States. The committee was assembled with members representing government, academia, and the private sector, which included experts in nanostructured materials and devices; PPPs; science, technology, and innovation public policy and analysis; intellectual property law; economics; international semiconductor policy; national security; and supply chain security, among other areas. The committee reviewed the competitive position of the United States in the global semiconductor ecosystem, how PPPs can strengthen semiconductor manufacturing, unique challenges and opportunities for DoD to support sustainability and resilience of the U.S. semiconductor ecosystem, and policies for PPPs that could be adopted to accelerate the development and adoption of disruptive technologies in the United States that benefit DoD and dual-use needs.
Models for semiconductor PPPs and other strategies are desired to provide understanding of the technical, financial, policy, security, and workforce elements needed to ensure U.S.-based production of semiconductors. Semiconductors are essential components of the devices that make everyday tasks faster and safer, help us attain a healthier and better quality of life, sustain next-generation information and communications systems, secure critical infrastructure, enable national security technologies, and strengthen U.S. competitiveness.
This study is intended to provide guidance for semiconductor PPPs and other strategies for assured supply of semiconductors for the United States, with emphasis on the needs of DoD; the report focuses on the topics outlined in the statement of task. (See Box 1-1.)
BOX 1-1
Statement of Task
A National Academies of Sciences, Engineering, and Medicine–appointed ad hoc committee will identify, explore, and assess public–private partnership models that have the potential to enable assured access for the production of semiconductors in the United States. The committee will produce a consensus report that addresses the following questions.
What is the competitive position of the United States in the global semiconductor ecosystem?
The committee will examine barriers to sustainable and resilient production of semiconductors in the United States and explore what helps drive production and create reliable supply chains of materials, equipment, components, and expertise. This could include an exploration of the industrial policies of other nations in support of industries in similar critical technology sectors.
How can public–private partnerships strengthen semiconductor manufacturing?
Given the inherent strengths and weaknesses within the global microelectronics industry, the committee will explore how to tailor public–private partnership strategies to address different aspects of the supply chain, such as tool manufacturing, fabless design (without fabrication plants), electronic design automation, software development, manufacturing capability and capacity, workforce development, domestic research and engineering capture (e.g., hardware start-ups), and raw materials (e.g., wafers, rare earths). This may include an analysis of establishing a semiconductor manufacturing corporation to leverage private-sector technical, managerial, and investment expertise, as well as private capital.
When partnering with the private sector for semiconductor production, what unique challenges and opportunities exist for the Department of Defense to support sustainability and resilience in the U.S. semiconductor ecosystem?
The committee will examine unique challenges for the Department of Defense in engaging with public–private partnerships on semiconductors. To provide meaningful new insights into the advantages and challenges of public–private partnerships, the committee will consider issues such as the research-design-production feedback loop, intellectual property, workforce development, export controls, global marketplace considerations, and specialized Department of Defense technologies not supported by the commercial industry.
What policies for public–private partnerships could be adopted to accelerate the development and adoption of disruptive technologies in the United States that benefit the Department of Defense and dual-use needs?
Given previously described barriers and challenges, the committee will discuss and recommend approaches for the Department of Defense to drive change. The committee will conduct an assessment of, and response to, the industrial policies of other nations to support industries in similar critical technology sectors, which will include analyses and recommendations for the consideration of U.S.-international partnerships in support of the global marketplace, as well as onshoring efforts. The committee will also examine and describe resources (amounts and types of funding) and actions that could help achieve or maintain a global leadership position for each aspect of the supply chain and effectively leverage private-sector investment.
THE STUDY PROCESS AND DATA GATHERING
The study was conducted over the course of approximately 9 months and consisted of a series of committee meetings and public data-gathering sessions. During this time, the committee held 21 public meetings to gather information from a broad spectrum of stakeholders from across industry, academia, and government to identify, explore, and assess PPP models and other strategies that have the potential to ensure access for the production of semiconductors in the United States. Additional individual research was carried out by members of the committee and staff to inform the report.
THE STRUCTURE OF THE REPORT
The report is divided into eight chapters, including this introductory chapter and a final chapter containing a list of the report’s recommendations. Chapter 2 addresses the history of the United States in the global semiconductor ecosystem as well as the current state of the U.S. semiconductor sector compared with other nations. Chapter 3 examines barriers to sustainable and resilient U.S. semiconductor production. These chapters provide the historical background and policy foundations for specific recommendations that follow in the next chapters. The committee’s assessment of characteristics needed for effective PPPs can be found in Chapter 4. In Chapter 5, the committee explores the unique challenges and opportunities for DoD in working with the private sector in semiconductor PPPs. Chapter 6 details general principles for DoD to adopt to accelerate the development and adoption of disruptive technologies in the United States that benefit DoD and dual-use needs. Barriers, PPP strategies, and advantages and challenges concerning workforce development for the semiconductor industry are examined in Chapter 7. Chapter 8 provides a list of all the recommendations in the report.
