{"id":20200,"date":"2022-07-15T15:31:18","date_gmt":"2022-07-15T19:31:18","guid":{"rendered":"https:\/\/a2globalelectronics.com\/?p=20200"},"modified":"2022-07-18T09:28:26","modified_gmt":"2022-07-18T13:28:26","slug":"dod-expanding-semiconductor-contracting-in-2022-impacts-on-eol-components","status":"publish","type":"post","link":"https:\/\/a2globalelectronics.com\/ja\/defense-aerospace\/dod-expanding-semiconductor-contracting-in-2022-impacts-on-eol-components\/","title":{"rendered":"DoD Expanding Semiconductor Contracting in 2022: Impacts on EOL Components"},"content":{"rendered":"

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How will DoD’s expansion of its strategic base of semiconductor manufacturing in the United States impact sourcing for EOL components?<\/h2>\n

The growing demand for advanced electronics that power defense systems has increased the need for trusted suppliers to deliver a reliable, secure stream of semiconductors for leading-edge systems. In response, the United States Department of Defense continues to expand the strategic base of semiconductor manufacturing in the United States.<\/p>\n

In May 2022, DoD announced<\/a> a $117 million Defense Production Act Title III Agreement with GlobalFoundries to strengthen the industrial base for domestic microelectronics. The agreement will ensure access to 45nm SOI semiconductors that are critical to current DoD strategic systems. This is the latest step in a long-term collaboration of GlobalFoundries and DoD.<\/p>\n

This contract is in addition to last year\u2019s agreement<\/a> with Intel Foundry Services to fabricate custom and integrated circuits. Intel intends<\/a> to partner with industry leaders to create a semiconductor IP ecosystem to develop chips.<\/p>\n

While the latest series of contracts isn\u2019t the first effort to onshore U.S. semiconductor production, it is the most comprehensive to date, bringing together Intel and global foundries along with the U.S. government\u2019s support. But behind this effort remains one of the major problems the U.S. DoD faces: shoring up sensitive systems and equipment with legacy systems brings supply chain issues, including sourcing EOL components for the defense and aerospace verticals.<\/p>\n

The goals behind the shift to U.S.-based foundries<\/h3>\n

The most prominent goal behind building foundry capacities is to accelerate growth in U.S. semiconductor manufacturing to meet future demand. The SIA reports<\/a> that the U.S. manufactured 37% of semiconductors in the 1990s. But, \u201ccurrently, only 12% of all chips are made in the U.S., and more than 80% of manufacturing capacity is concentrated in Asia. If nothing is done to improve the situation, the U.S. will fall even further behind in the coming years.\u201d<\/p>\n

While the U.S. has targeted improving production, much remains to play out as the complex process of merging technology development, wafers<\/a>, and packaging<\/a> must all come together.<\/p>\n

But it is important to note that this shift to onshore production is forward-facing only. It will not impact the challenges behind EOL parts<\/a> that the DoD relies on in concert with more current technologies.<\/p>\n

Covering all of the gaps, including EOL components<\/h3>\n

EOL notices are a reality in the current market, with consolidation of semiconductor fabs narrowing lines and cutting older, less lucrative models. Defense and aerospace verticals are vulnerable when these \u201clong-tail\u201d parts are cut out of production, resulting in EOL notices.<\/p>\n

Building newer fabs onshore attacks an entirely different part of the sourcing picture than pursing EOL components. Dealing overall with the supply and demand requires a multi-pronged approach to address the complex process of establishing onshore production of semiconductors while maintaining technology that relies on EOL components.<\/p>\n

Looking at the whole picture, challenges remain<\/h3>\n

Taking a longer view to sourcing shows a dynamic demand profile for the defense and aerospace verticals. Supply chain visibility can always present challenges when forecasting longer term. This is particularly true in the current market conditions, where global events have the power to shake up complex semiconductor supply chains with lasting ripple effects.<\/p>\n

Managing inventory for both new and legacy components will require ongoing strategies to plan, redesign, or strategically source components.\u00a0 <\/span>While the current U.S. DoD efforts to onshore semiconductor production have a tremendous amount of energy and attention, supporting legacy systems with supply chain issues, including EOL components, remains challenging.<\/p>\n

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