Arguably, the most important invention of the 20th century wasn’t the automobile, plane, or even the internet. It was the transistor, a revolutionary type of semiconductor that became the foundation of all modern electronics by controlling and amplifying electrical signals.
The first successful semiconductor demonstration took place at Bell Labs in 1947. The technology, which replaced unwieldy and inefficient vacuum tubes, was an instant hit. Advances, especially the switch from germanium to silicon conductors, quickly led to breakthrough commercial and military applications, followed by further discovery, evolution, and production.
The Brains of Electronics
Semiconductors, also known as microchips, serve as the brains of today’s electronics—from everyday devices such as smartphones, washing machines, and TVs to emerging technologies like electric and automated vehicles. They are also vital to our national defense, and are components of everything from guided missiles to fighter jets.
The recent surge in semiconductor demand has affected supply chains across sectors, including automobiles, personal electronics, and appliances. While short-term demand issues may be monopolizing public attention for the moment, it’s the long-term future of this industry that requires the most urgent and dedicated efforts.
Seventy-five years after the semiconductor’s first demo, America’s once-universal dominance in semiconductor manufacturing has ceded ground to overseas producers. Only 12% of the world’s semiconductors are made in the U.S., down from 37% in 1990. By contrast, nearly 80% of semiconductor manufacturing facilities, known as “fabs,” are concentrated in Asia, according to the Semiconductor Industry Association (SIA), putting U.S. technological leadership at risk.
Of the six fabs constructed in 2019, none is located in the U.S. Four opened in China, 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, according to the SIA.
National Strategy Needed
To support economic prosperity, technological advancement, and national security in the U.S., a coalition of industry, academic, and state partners in 2021 launched the National Semiconductor Economic Roadmap (NSER, or “answer”), an industry-led effort to boost U.S. semiconductor competitiveness through a focus on the workforce, supply chain, and infrastructure while supporting semiconductor research and development, design, manufacturing, and end applications.
Participants in NSER, including private-sector companies, higher-education institutions, and industry associations, are now convening to identify precompetitive technical challenges, infrastructure and supply-chain issues, and new workforce skill requirements.
State perspectives are crucial to NSER. Arizona recently announced two massive semiconductor initiatives: a $20 billion investment from Intel to build two fabs, creating 3,000 jobs, and a $12 billion investment by Taiwan Semiconductor Manufacturing Company (TSMC) to build a fab in Phoenix, creating 2,000 jobs.
A robust and growing workforce is one of the main assets drawing the world’s leading manufacturers to Arizona, one of the top five states for semiconductor employment, with more than 200 semiconductor manufacturing establishments employing more than 22,000 people. Labor-market analyst Emsi consistently ranks the Phoenix metro area at the top of its Talent Attraction Scorecard for the region’s ability to attract and retain high-quality workers.
Driving this talent growth are universities such as Arizona State University (ASU), which U.S. News and World Report has named America’s most innovative university for the past seven years. At ASU’s Fulton School of Engineering, the largest engineering school in the country, more than 25,000 students are enrolled in engineering programs—a 170% increase since 2010.
ASU plans to build on this growth even further with the opening of the new School of Manufacturing Systems and Networks, prominently focusing on the growing semiconductor sector.
As Arizona’s example shows, states are on the front lines of semiconductor attraction and investment and workforce development. These perspectives are critical to advancing U.S. competitiveness and combating chip shortages and supply-chain issues.
To maintain its edge and even increase its competitive position for semiconductors, the U.S. needs a national semiconductor strategy. For that, look to NSER.
Learn more about how your organization can benefit from supporting NSER.
