Lawmakers in US Propose Semiconductor Boots

03-07-2020 | By Robin Mitchell

In June, lawmakers in the US proposed a new bill that would help encourage the development of US chip development and production. What has pushed this bill, and why is it important for engineers to consider?

The East and West Relations

The importance of the semiconductor industry cannot go unnoticed; nearly all aspects of life are controlled by it. This growth is fuelled by the continuing push for technological improvement, and consumerism which provides companies with competition in developing the latest low-cost solution. However, while countries such as the US provide the vast majority of research and development, they are not the largest producers of devices. The US holds 48% of the worlds market share in semiconductors, but only exports 6% of all devices globally, with China providing 10.84%. This figure plummets further when looking at semiconductor devices overall all with China providing 25.39% of the global supply.

Under normal situations, this would not be an issue for countries such as the US as the production of goods will generally be outsourced to markets with cheaper manufacturing costs. However, the past two decades have seen multiple incidents of China stealing intellectual property, industrial espionage, and surveillance of foreign powers. To combat this, the US government had recently entered a trade war to force China to respect patents, as well as discourage interference in foreign supply chains. But trade wars and tariffs can only go so far, and this is what a group of lawmakers aim to solve with their latest proposed bill called CHIPS.  

The New Proposal - Creating Helpful Incentives to Produce Semiconductors

CHIPS, which stands for Creating Helpful Incentives to Produce Semiconductors, would provide tens of billions of dollars of investment in the semiconductor industry over the next 10 to 15 years. The bill also provides finical incentives with the use of tax credits for research and development of silicon technology. But one aspect of the bill that is of most interest is the establishment of a National Semiconductor Technology Centre which would be dedicated to the research of advanced chips, and their packing technology. According to the lawmakers responsible for the proposed bill, the US has somewhat flatlined on semiconductor development in the past few years while other countries (such as China) have grown massively. If passed, the bill would help the US improve its position in the world as a semiconductor leader as well as being a more major manufacturer of devices.

The ability for designers to use devices produced in countries such as the US helps to secure designs and supply chains from foreign powers that may attempt to exploit weaknesses, develop counter solutions, or use the supply chain for their own purposes such as industrial espionage. In the ideal world, all sensitive devices would be manufactured in the same place as it was designed, but the cost incentives provided by eastern manufacturers makes this decision difficult. This cost decision also reflects the final price of the product, and being able to charge significantly less makes the product more likely to sell, thus turning a profit. However, it is not just the semiconductor industry that is at risk; even the PCB production and manufacture of a product is at risk. One example of this is when a video processing unit utilised by servers was found to have had an added part that provided hackers with a remote backdoor. Unknowing to the original designers, somewhere in the supply chain edited the PCB files to include the small IC, and then the production facility included the new chip which was disguised to look like a filter product for the main processor.


While the bill mainly affects the US, it demonstrates how engineers should be cautious when designing products that may be sensitive in nature. Just because a PCB design has been specified in a specific way does not stop the inclusion of hacking devices down the manufacturing line. 


By Robin Mitchell

Robin Mitchell is an electronic engineer who has been involved in electronics since the age of 13. After completing a BEng at the University of Warwick, Robin moved into the field of online content creation, developing articles, news pieces, and projects aimed at professionals and makers alike. Currently, Robin runs a small electronics business, MitchElectronics, which produces educational kits and resources.