Over the past 20 years, the U.S. microelectronics industry has ceded much of its technology leadership to Asia. Responding to economic realities, American semiconductor manufacturers have transferred increasing control over research and development, intellectual property, and manufacturing to government-subsidized companies in Taiwan and China.

This trend has placed critical power, defense, intelligence, and telecommunications systems at risk. Counterfeit and compromised microelectronics plagues the U.S. government’s supply chain and threatens the reliability of our defense networks.

“The catastrophic failure risk inherently found in counterfeit semiconductors places our citizens and military personnel in unreasonable peril,” said Brian Toohey, president of the Semiconductor Industry Association, in his testimony for a recent congressional inquiry into counterfeit electronic parts in the DOD supply chain.  Toohey also estimated that counterfeiting costs U.S.-based semiconductor companies over $7.5 billion per year and has resulted in the loss of 11,000 jobs.

Losing much of our domestic semiconductor-manufacturing base leaves private industry, university research centers, and the U.S. federal government with few choices for procuring advanced semiconductors. These chips are critical to continued research and development of core high-tech infrastructure. This puts in jeopardy the future viability of:

•    More efficient power grid management systems
•    High speed computer networks
•    Department of Defense weapon systems
•    Life-saving medical devices
•    Automotive safety systems
•    Aviation instrumentation
•    Telecommunications controls

The microelectronics industry’s foreign migration also reaches beyond government security and into every sector of our economy. It has dramatically reduced secure, reliable access to small-lot, customized microelectronic components for both government and industry. It has undermined our ability to protect valuable intellectual property and to support our own research and development efforts. And it has robbed the U.S. economy of much-needed jobs.

These threats will only worsen unless critical microelectronics technology and manufacturing is brought back into a controlled U.S. based facility.

Next: The Strategic Problem>>>