Labs Over Fabs? The US Strives to Solve the Chip Shortage

July 26, 2021 by Lianne Frith

The stakes are high with the continuing chip shortage; however, what solutions are trying to take the pressure off? Could the answer be in supporting laboratories over fabrication facilities?

The importance of semiconductor chips is being realized now more than ever before. They power everything from smartphones in our pockets to defense systems and renewable energy. However, this shortage that the industry has been facing is causing some significant shake-ups.

As demand soars, supply chains struggle, and capacity buckles under pressure, something needs to be done. Various solutions have been tossed around; even the government has been attempting to get involved. 


The global shares of the semiconductor industry. Image used courtesy of SIA


One response is the US shifting its focus from fabrication facilities to research laboratories. The aim is to innovate, fight off the competition and be ready to meet tomorrow's demands. 


The Current Status of the Chip Shortage

Semiconductor fabrication plants (or shortened to fabs) are complicated manufacturing facilities that cost tens of billions of dollars and take years to build. However, even once they are up and running, they can't quickly ramp up supply. The lasers can print billions of transistors into tiny areas of silicon to produce a batch of chips, but it can take months to do so. This setback results in a swing between undersupply and oversupply with lags in production. 

The problem now is a massive expansion of new technologies that rely on chips, especially with 5G-based automation growth, and most vehicles require more technology

This need has resulted in the demand outstripping supply. While most chip design process still happens in the US, much of the production is now based in Asia due to lower costs. When you add a global pandemic to the mix and a colossal interruption to supply chains, you have the ingredients for a perfect storm. The supply chain issues have led to shortages everywhere, with the automotive industry being hit the hardest, at this moment. Meanwhile, companies have begun to overorder in fear of running out, only adding to the problem.

Research and industrial scientists had seen the shortage coming, but it wasn't until assembly lines were brought to a halt last year that public officials began to realize the crisis that is upon us. 

There aren't enough chips being made in the US, and there hasn't been enough focus on where they are being made and how long it is taking. However, the problem is more than purely about the shortage in production. It is about the race to create the next generation of semiconductors needed to broaden economic opportunities, conserve natural resources and produce better access to technology. 

Since this problem is drastic and wide-reaching, solutions are being tossed around, hoping to stick and put a dent in the issues. 


Potential Solutions to the Problem

Recently, even universities are trying to take on the chip crisis. One in specific is Stanford University, which is aiming to create a way to reduce the friction between academic discoveries and practical technologies. 

The university has outstanding facilities and can train Ph.D. students to become next-generation chip experts who could propel semiconductor technologies forward. It hopes that, by creating a national lab to fab infrastructure, it can democratize IC design. This solution offers an excellent opportunity for electrical engineers at the university; however, it may well be a long game to solve the chip shortage. 


An employee walks through Intel Corporation’s wafer fabrication facility in Chandler, Arizona.

An employee walks through Intel Corporation’s wafer fabrication facility in Chandler, Arizona. Image used courtesy of the Library of Congress


Another alternative solution that has been tossed around is boosting semiconductor manufacturing capabilities. To this end, GlobalFoundries has announced expansion plans for its most advanced manufacturing facility. 

The plans include an immediate $1 billion investment to its existing facility to address the current shortage, as well as the construction of a new fab that will double the site's capacity. This expansion hopes to create thousands of jobs at the site and thousands more in the local economy. However, the investment alone is small in the grand scheme of things, and the new fab will take several years to complete. 

From universities to chip manufacturers, solutions for the chip shortage are on everyone's minds; even the US government is trying to see what it can do. 


What is the US Government Doing?

At the beginning of June, the US passed a new vote for the Innovation and Competition Act. This bill was initially designed to lift the US's semiconductor production and research and development, specifically for AI and space exploration, and boost global competitiveness. 

The main focal point of the bill is a $52 billion investment to spur new domestic production of semiconductors. The bill claims to offer a vast opportunity to electrical engineers to fund research into new chip technologies and applications. 

Meanwhile, at a supply chain hearing in July, the Senate Commerce Committee examined supply chain resilience in security, the strength of the manufacturing base, partnerships, and competition, specifically with China. The hearing looked at avoiding supply chain disruptions when facing trade frictions, geopolitical tensions, natural disasters, public health emergencies, and economic distress and reviewed diversification in terms of sources of input and markets for products. 

Overall, however, the government aims to push the focus of labs over fabs to help solve current and future supply issues. 


Why the Shift From Fabs to Labs? 

The semiconductor industry has traditionally been split between the laboratories that design them and the fabrication facilities that make them. This division entails two huge fixed costs, one for all of the research and development required for the ideas and the other for the capital equipment required to build the fabs. However, having invested more heavily in production over past years, the US government has realized that a change is needed. 

By switching its focus from supporting fabrication facilities to research laboratories, the US government hopes to rebuild its innovative edge. Production will certainly have its place, but more support is required for the creation of specialized chips. 


IBM Research created the industry's first 2nm chip. Image used courtesy of IBM


Several unfunded projects represent enormous untapped potential. The government hopes to release this potential by building centers of excellence with cutting-edge research. By accelerating science into solutions, they could create next-generation technologies that will shore up the semiconductor ecosystem. 


How Could The Shift Affect Electrical Engineers?

The shift to supporting laboratories could give the Department of Energy's Office of Science the first real authorization to use its budget on semiconductor research facilities. 

By investing in research that is not commercially viable, electrical engineers have an opportunity to develop next-generation technologies. What's more, the shift could do a lot for the skills shortage, encouraging technical talent back to the semiconductor industry. Building talent from schools to universities to corporations and startups will help ensure an ample supply of semiconductor engineers to meet ever-growing demands. 



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