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The chip shortage delivered a wakeup call for our country to make our supply chain more resilient and increase domestic manufacturing of chips.
October 10, 2022
By: DAVID SAVASTANO
Editor, Ink World Magazine
Right after the pandemic hit, I bought a new vacuum cleaner. I wanted to step up my housecleaning skills since I knew I’d be home a lot more. I was able to buy mine right away, but friends who wanted new appliances weren’t so lucky. My relatives had to wait months for their new refrigerator to arrive. And it wasn’t just appliances. New cars were absent from dealership lots, while used cars commanded a premium. What do all these things have in common? Semiconductor chips. The pandemic disrupted the global supply chain, and semiconductor chips were particularly vulnerable. The chip shortage delivered a wakeup call for our country to make our supply chain more resilient and increase domestic manufacturing of chips, which are omnipresent in modern life. “To an astonishing degree, the products and services we encounter every day are powered by semiconductor chips,” says Mike Molnar, director of NIST’s Office of Advanced Manufacturing. Think about your kitchen. Dishwashers have chips that sense how dirty your loads are and precisely time their cleaning cycles to reduce your energy and water bills. Some rice cookers use chips with “fuzzy logic” to judge how long to cook rice. Many toasters now have chips that make sure your bread is perfectly browned. We commonly think of chips as the “brains” that crunch numbers, and that is certainly true for the CPUs in computers, but chips do all sorts of useful things. Memory chips store data. Digital cameras contain chips that detect light and turn it into an image. Modern TVs produce their colorful displays with arrays of light emitting diodes (LEDs) on chips. Phones send and receive Wi-Fi and cellular signals thanks to semiconductor chips inside them. Chips also abound on the exteriors of homes, inside everything from security cameras to solar panels. The average car can have upward of 1,200 chips in it, and you can’t make a new car unless you have all of them. “Today’s cars are computers on wheels,” an auto mechanic said to me a few years ago, and his words were never more on point than during the height of the pandemic. In 2021, the chip shortage was estimated to have caused a loss of $110 billion in new vehicle sales worldwide. The chips in today’s cars are a combination of low-tech, mature chips and high-tech, state-of-the-art processors (which you’ll especially find in electric vehicles and those that have autonomous driving capabilities). Whether mature or cutting-edge, chips typically need to go through a dizzying series of steps — and different suppliers — before they become finished products. And most of this work is currently done outside this country. The U.S., once a leader in chip manufacturing, currently only has about a 12% share in the market. To reestablish our nation’s leadership in chip manufacturing, Congress recently passed, and President Joe Biden recently signed into law, the CHIPS Act. The CHIPS Act aims to help U.S. manufacturers grow an ecosystem in which they produce both mature and state-of-the-art chips at all stages of the manufacturing process and supply chain, and NIST is going to play a big role in this effort.
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