The U.S. may spark a new semiconductor revolution by harnessing the law and the federal budget. Nevertheless, that may be only a part of the equation.
“The federal government has got to be one of the largest customers for Hewlett Packard workstations, for instance,” said Geremy Freifeld, technology portfolio leader and laboratory fellow at Draper, a nonprofit research and development organization. Draper estimates that around one-quarter of semiconductor demand is state-driven.
Draper sees a path toward designing weapons-specific semiconductors at first and following an evolution into mass production.
“We’re going to start at the individual weapons-system level to fund the manufacturing, but for sustainability, I think that the amount of specific microelectronics the government will procure in the future will continue to grow. Right now they talk about defense-specific parts being less than 1% of microelectronic demand,” Freifeld said.
“We’re in an interesting time geopolitically with regards to a few key market forces and economic forces as it relates to the semiconductor market,” said Walt Gall, CEO of Coherent Logix.
After the chip shortages due to the pandemic and reports that Chinese technology could introduce strategic changes in the global balance of power, the United States moved to limit the access of the Asian country to the West’s latest scientific achievements.
“We want to maintain that leadership position, and we certainly don’t want to have that come into a risky situation, whether it’s compromising our economic prosperity or our national security interests,” Gall explained.
On October 7, 2022, the United States banned the export of the latest semiconductors, or chips, to the People’s Republic of China. The measure aimed at stopping the Asian country from utilizing technology “to produce advanced military systems including weapons of mass destruction; improve the speed and accuracy of its military decision making, planning, and logistics, as well as of its autonomous military systems; and commit human rights abuses,” according to a U.S. Department of Commerce release.
Beijing’s official reaction was limited at first. China’s official spokesperson fielded 11 questions in a regular Ministry of Foreign Affairs press conference. Only an Agence France-Presse (AFP) news agency journalist asked about the restrictions, and Foreign Ministry Spokesperson Mao Ning responded.
“By politicizing tech and trade issues and using them as a tool and weapon, the U.S. cannot hold back China’s development but will only hurt and isolate itself when its action backfires,” said Ning, a George Washington University alumna, a day after the U.S. release was published.
The inevitability of China’s technological rise has been the official theme since then. But all that glitters is not gold.
“The Global Times,” a state outlet, followed up the next day with a strongly worded editorial stating, “Only arrogant and ignorant people can truly believe that the U.S. can block the development of China’s semiconductor or other technology industries by these illegitimate means.” Meanwhile, the “People’s Daily,” the Chinese Communist Party’s official outlet, chose to wait.
On December 5, 2022, the party’s official periodical carried a short commentary on the restrictions titled “U.S. impedes fair competition by protecting own sci-tech hegemony.” It took the Communist Party 59 days to produce 99 words about a change Secretary of State Anthony Blinken called an “inflection point” in a speech delivered in October 2022.
Producing semiconductors requires engineering, raw materials and suppliers. This translates as an ecosystem. In the case of semiconductors for defense, a layer of security must be added.
“Most of the electronics that we do for national security, I would say, aren’t commercially viable because they’re either focused on extreme security, or radiation hardness and are precision instrumentation way beyond what a consumer product would require,” Freifeld said.
