WASHINGTON ― A new, multipronged strategy is needed for the U.S. Department of Defense to secure access to advanced semiconductor technologies, one of the agency’s defining challenges, says a new report from the National Academies of Sciences, Engineering, and Medicine. The report analyzes the competitive position of the United States in the global semiconductor ecosystem, from base material supply chains to the necessary expert workforces.

Following passage of the CHIPS and Science Act of 2022, the federal government has embarked on a sweeping effort to promote and protect U.S. leadership in the semiconductor industry and ensure economic and national security. The new report recommends that DOD undertake long-term investments, partnerships, and coordination with the commercial sector, universities, and other parts of government ― building on the interagency work established by the CHIPS and Science Act. DOD should continue to leverage existing public-private partnerships, such as the recently launched Microelectronic Commons initiative, as these partnerships remain a valuable tool for supporting DOD’s semiconductor needs.

DOD uses commercial off-the-shelf semiconductor chips as well as highly specialized, custom-built chips for its systems, including for radars, sensors, high power density electronics, and technology used in extreme environments. The agency played a critical early role in creating the semiconductor industry by funding key innovations and acting as a major customer, and its integration of U.S. microelectronics advances into its communications, deterrence, and weapons systems has led to decades of technical superiority. However, U.S. leadership in semiconductor technology is no longer assured, the report says, and the capabilities of the domestic manufacturing sector have eroded.

“The United States is heavily dependent on other nations for both commercial and defense semiconductor needs, which has created a truly challenging environment for DOD and sometimes frustrated its efforts to be quick and innovative,” said Liesl Folks, chair of the committee that wrote the report, and professor of electrical and computer engineering at the University of Arizona. “There is an urgency now for DOD to modernize, become nimbler, support new advances, more flexibly engage with the microelectronics sector, and reap the resulting cost and technological benefits.”

There is a significant risk that the most advanced chips in the world will continue to be produced abroad and by foreign-owned companies, the report says. These chips are critical for DOD to sustain its technological dominance. DOD should coordinate with other agencies to help reshore these leading-edge capabilities to the United States or to “friend-shore” them by maintaining a diverse network of suppliers across a range of friendly nations.

The success of DOD’s microelectronics strategy will be determined largely by its ability to partner with the private sector, the report says. The agency’s challenges are currently exacerbated by self-imposed regulatory and administrative barriers. The report identifies new ways for DOD to engage with commercial semiconductor firms while reducing bureaucratic and procurement hurdles. 

Technology and Modernization Investments

DOD should prioritize investing ― via funding and active involvement ― in disruptive “leap-ahead” semiconductor technologies to ensure the agency’s specialized needs are being met and to keep it at the forefront of innovation, the report says. In particular, artificial intelligence and machine learning are currently driving advanced applications across many operational fronts, and are dependent on access to very large numbers of commercial chips. The report details several ways DOD can continue to refine its implementation strategy for these technologies.

The Department of Commerce, Department of Energy, National Science Foundation, and DOD are all funding a variety of research and development initiatives through the CHIPS and Science Act. The report says that a lack of interagency efforts would hamper earning maximum return on these investments and recommends formal coordination to ensure strategic alignment.

The report also urges DOD to take action to keep its systems up to date. The agency often takes a decade or more to develop new weapons systems, which creates the need for information systems to be updated during development, causing increased costs and delays. Also, Congress historically has favored providing funding for new procurements over funding upgrades for existing aircraft, ships, tanks, or other platforms, which can often be in service for decades. Producing identical replacement chips is increasingly expensive for DOD, and these legacy chips have higher security risks and lower performance than modern chips.

DOD should pursue a comprehensive modernization strategy to accelerate the adoption of more advanced chips, including ones that can be rapidly swapped out. The report recommends incorporating software and hardware updates on a much more frequent and ongoing basis, and that DOD support a project with private-sector partners to explore the utility of modern electronic design automation tools to facilitate and streamline the replacement of older chipsets.

Bridging Education and Workforce Gaps

The United States faces a significant talent shortage in its semiconductor workforce, and this gap is expected to grow over the coming decades, the report says. This workforce is comprised of technicians, who operate and maintain equipment used to make semiconductor chips and components; engineers, who research, develop, design, and improve semiconductor devices and fabrication processes; and computer scientists, who design and develop software and hardware for semiconductor systems and technologies. Worker shortfalls are projected for each of these pipelines.

Innovative approaches are needed in higher education to help create the talent pool required for a strong semiconductor workforce, the report says. It identifies a series of best practices for teaching institutions, industry, and DOD to help overcome these problems, including shorter training programs, leveraging online teaching, and apprenticeships. DOD should coordinate its microelectronics workforce initiatives with the CHIPS and Science Act initiatives being stewarded by the National Institute of Standards and Technology and NSF, and also coordinate with other agencies to advance immigration reforms that increase access to needed talent.

The study — undertaken by the Committee on Global Microelectronics: Models for the Department of Defense in Semiconductor Public-Private Partnerships ― was sponsored by the U.S. Department of Defense.

The National Academies of Sciences, Engineering, and Medicine are private, nonprofit institutions that provide independent, objective analysis and advice to the nation to solve complex problems and inform public policy decisions related to science, engineering, and medicine. They operate under an 1863 congressional charter to the National Academy of Sciences, signed by President Lincoln.

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