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U.S. Computer Chip Production’s Global Share Fell to 12%

 U.S. semiconductor manufacturing capacity has been declining for decades now. Semiconductors are the memory and logic chips used in phones, computers, appliances, and vehicles. In 1990, the U.S. share of global semiconductor fabrication was 37%, but it has reduced over the years significantly. According to the Semiconductor Industry Association, it stands only at 12% currently.

 

President Joe Biden gave an executive order for a review of supply chains for important products. That review has put a spotlight on critical goods, such as semiconductors.

 

Presently, 88% of the semiconductor chips that U.S. industries use, including the automotive and defense industries, are manufactured outside the U.S. However, if the U.S. wants to be the global leader in electronics, it needs to rally its own semiconductor industry for three reasons: lower capability, limited investment, and high global demand.

 

It seems, U.S. chip companies prefer to rely on international partners to fabricate the chips they design instead of doing business with local firms. Such an approach reflects the United States’ diminished capability and reduced trust in U.S. manufacturers.

 

That’s more significant, considering that U.S. semiconductor companies own 47% of the global chip sales market. However, only 12% of the product are manufactured in the United States.

 

If the companies want to meet buyers’ expectations, they need to develop smarter and faster electronics. That requires chip design innovation, which, on the other hand, depends on the most advanced manufacturing technologies available.

 

How can the U.S. semiconductor companies achieve that goal? 

 

In semiconductor fabrication, advances are based on the number of transistors. Those are the smallest of a chip’s electronic components. The most advanced fabs – semiconductor fabrication technologies and facilities, are 5 nanometers in size.

 

The number refers to the process. Usually, the smaller the nanometer rating means the more transistors per square millimeter. For instance, the highest transistor densities are approximately 100 million per square millimeter.

 

South Korea and Taiwan are currently developing 3-nanometer fabs. But the U.S. does not have a 7-nanometer fab yet.

 

Intel has recently announced that it won’t begin producing its 7-nanometer fab until late 2022 or early 2023. This means that the U.S. has no means to make the most advanced chips.

 

Meanwhile, the global demand for laptops, cell phones, and other work-at-home devices increased significantly due to the Coronavirus pandemic, putting pressure on fabs to increase the number and capabilities of chips.

 

Biden’s executive order about supply chains is an especially important step in determining the investments, which will improve the prospects for the U.S. semiconductor industry.

 

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