Securing state-wide chip production is crucial to several manufacturing industries, such as mobility, and to maintaining the health of Michigan’s economy.
On November 17, 2022, Governor Gretchen Whitmer joined forces with The Michigan Economic Development Corporation (MEDC) to form the Semiconductor Talent Action Team (TAT). This collaboration, a public/private alliance led by the MEDC, aims at making Michigan a leader in semiconductor talent, production, and growth.
MEDC’s Talent Action Team involves this organization, the State of Michigan, SEMI (an industry association for global electronics design and its manufacturing supply chain), and four key universities: Michigan Technological University, Michigan State University, University of Michigan, and Wayne State University. Other partners include key community colleges.
The Semiconductor TAT has several goals:
- Expanding the development of Michigan-created semiconductors
- Ensuring the onshoring of both legacy and advanced semiconductor systems
- Creating well-paying manufacturing jobs
- Reducing semiconductor shortages
- Securing the supply chain
Addressing the Semiconductor Shortage
Semiconductors are the foundation for integrated circuits (or microchips), which are vital components in manufacturing. Semiconductors are material products that lie between insulators (glass) and pure conductors (such as copper and aluminum). These versatile products can have their conductivity altered (through the addition of impurities) to meet the needs of various devices. Chips are found in appliances, medical equipment, gaming devices, smartphones, computers, and, increasingly, automobiles.
In short, they’re everywhere.
But COVID put the brakes on chip production. Labor problems, the shutting down of assembly lines, the closing of factories, and disruptions of the global supply chain all contributed to a semiconductor shortage. There were also drastic reductions in raw materials and substrates and slowdowns in crucial processing steps, such as wire bonding and testing. As a result, consumers were unable to purchase electronic devices as well as larger goods such as appliances and vehicles.
Protecting the Automotive Industry
But the global semiconductor shortage caused significant problems for the automotive industry, driving down both production and sales. Some companies, such as GM, were even forced to build vehicles that were missing parts. By some estimates, the reductions in automotive sales were extreme: down by 80% in Europe, 70% in China, and nearly 50% in the United States.
Why the plummeting sales? Even the most basic automobile is heavily reliant upon semiconductors. That is, the average car can contain more than 100 chips. These tiny devices power such necessary components as the navigation display, digital speedometer, and fuel-pressure sensors.
More sophisticated vehicles, on the other hand, may contain thousands of these chips. For instance, these chips are found in advanced safety features, electrical and powertrain systems, and connectivity components.
And the need for these chips in expanding. Market research company Yole predicts that by 2026, semiconductors in cars will value $78.5 billion dollars, which adds up to a 14.75% CAGR from 2020.
Therefore, securing the semiconductor supply chain is especially crucial to the mobility industry, and, by extension, to Michigan’s economy. To help prevent these shortages and their repercussions, and to further tap into the burgeoning semiconductor market, Michigan’s Semiconductor TAT is on board to secure the state’s semiconductor production.
Accessing Michigan’s Semiconductor Talent
Michigan is well-suited to take advantage of these funding opportunities. The state has a history of semiconductor manufacturing. That is, Michigan is home to Hemlock (semiconductors), SK Siltron (semiconductor wafers), and KLA (semiconductor R & D and supply). Even closer to Michigan Tech is Calumet Electronics, which has been in Calumet since 1968. This Michigan company specializes in manufacturing printed circuit boards for the domestic industrial, power, aerospace, defense, medical, and commercial markets.
What’s more. This state has almost 50 semiconductor-related courses and programs. Michigan Tech, for instance, from its undergraduate to graduate degrees in materials engineering, mechanical engineering, and its electrical and computer engineering ; as well as its specialized graduate certificates in manufacturing engineering and automotive systems, has a long history in preparing students for all things semiconductors. Whether its the materials from which they are made, to their design, processing, properties, applications, integrations, and even their repurposing, Tech has a program. The university also has a history of collaborating with the automotive industry and helping to ensure its success.
Furthermore, on May 5, 2022, The Michigan Strategic Fund approved the Semiconductor Technician Apprenticeship Network Program. Michigan is one of only three states, in fact, that is launching plans to define curricula that will support employers in the semiconductor industry.
In short, both Michigan Tech and the state have the drive, talent, resources, and history to advance semiconductor production and to make Michigan a leader on both the national and global stages.
Making a Historic Investment in Chip Technology
The Semiconducor TAT answers the call of the bipartisan 2022 CHIPS and Science Act (August 9, 2022). Nearly a year in the making, this act implemented previous programs under the 2021 CHIPS for America Act (January 2021). It also authorized nearly $250 billion in semiconductors and scientific research and development. This monumental amount adds up to the country’s largest publicly funded R & D program.
The CHIPS and Science Act responds not only to semiconductor shortages, but also to the decline in American microchip fabrication. That is, in January 2021, the US manufactured 12% of the world’s chips, which is down from 37% in the 1990s.
The act, which focuses on building key critical semiconductor technologies in the United States, has several goals:
- Building a stronger and more diverse workforce
- Creating high-paying technical manufacturing jobs
- Supporting and extending American manufacturing
- Investing in American science and innovation
- Rebuilding and securing our supply chains
Most of the act’s funds ($169.9 billion) are dedicated to research and innovation. These funds are dispersed among several foundations, which include the National Science Foundation (NSF), Department of Commerce (DOC), Department of Energy (DOE), and the National Aeronautics and Space Administration (NASA).
All departments will expand semiconductor research, development, training, and talent. For instance, in its budget, NSF’s mandate is investing in research, building a STEM workforce, and expanding rural STEM education.
Supporting the Growth of Local and State Economies
The act also directs the DOC to create 20 geographically distributed regional technology hubs. These hubs will focus on developing technology, creating jobs, promoting U.S. innovation, and providing economic development activities for distressed communities.
Besides the $169.9 billion dedicated to research, there is a $54.2-billion-dollar federal advancement for domestic semiconductor production and public wireless supply chain innovation. $39 billion, the responsibility of the Department of Commerce (DOC) Manufacturing Incentives, is allocated to building, extending, and modernizing domestic semiconductor facilities. Another $200 million is for jump-starting the development of the domestic semiconductor workforce, which has faced extreme labor shortages.
In short, the CHIPS and Science Act will support American manufacturing and create jobs, It will also ensure that, when it comes to STEM education, semiconductor research, and chip production, the US will be a global force.
Taking First Crucial Steps: What’s Next for the TAT?
The ultimate goal of the Semiconductor TAT is to help Michigan access funding in order to increase its STEM workforce. Another objective is leveraging the state’s talent, assets, resources, so that it leads the future of the semiconductor industry.
But big goals begin with small steps. The TAT’s first objective is having its partners form advisory boards. These boards will provide strategic direction on the semiconductor programs, talent, and research that exist at Michigan’s universities and colleges. They will also analyze the “broader semiconductor and technology ecosystem” to develop a better understanding of industry needs for semiconductors.
The university community looks forward to learning about Michigan Tech’s contributions to the Semiconductor TAT as well as this group’s ongoing initiatives.