The Pentagon plans to make an emergency request of up to 2 billion U.S. dollars by early March next year to provide funding for custom semiconductor manufacturing of weapons such as the B-2 bomber before the semiconductor production line is closed and acquired by Abu Dhabi.
According to Bloomberg News, GlobalFoundries has sold its plant in Fisak, New York to Mubadala Development Company, which is wholly owned by the government of Abu Dhabi in the United Arab Emirates. The factory produces dedicated chips for the Global Positioning System (GPS), and the new owner of the factory will no longer manufacture these chips.
Chip and weapon technology
These chips are used in systems that rely on semiconductors to operate, including B-2 stealth bombers, Army and Marine Corps combined light tactical vehicles, Stryker wheeled infantry fighting vehicles, Arleigh Burke-class naval destroyers, and Air Force small-diameter bombs.
The U.S. Department of Defense is facing an imminent supply crisis because of the global shortage of chips for consumables from mobile phones to self-driving cars. GlobalFoundries is expanding chip production at the expense of military manufacturing.
Given the importance of semiconductors in data acquisition, processing, and memory chip manufacturing, its shortage has become a challenge for several important industries, especially the automotive, smart phone, and electronic game industries.
But what are semiconductors, their types, and their criticality to important industries?
Semiconductors are a group of crystalline solids with medium conductivity, energy saving and low price, which are widely used in the electronics industry.
The Pentagon is taking swift action to “solve the problem of declining semiconductor manufacturing capacity” (European News Agency)
The Pentagon is in trouble
Jessica Maxwell, a spokesperson for the U.S. Department of Defense Procurement Office, said the Pentagon is taking swift action “to solve the problem of reduced manufacturing capacity.”
According to the “Interim Expenditure Act” passed by Congress, an initial order of US$885 million will be placed before December 15 to US contractors who rely on components to manufacture military equipment. They can sign a large portion of chip orders with GlobalFoundries.
Maxwell added that GlobalFoundries “has enough time to process orders and manufacture parts before the production line shuts down.”
As evidence of the seriousness of the matter; $885 million is the only Pentagon-related exception that the White House Budget Office asked Congress to approve in its temporary spending measures.
The remaining US$2 billion orders will be issued before March 3, 2022, and sales are expected to be completed at the factory in December of the same year. According to a defense official who asked not to be named, the manufacturing process from the silicon disk to the finished chip takes about three months.
GlobalFoundries operates manufacturing plants in the United States, Europe and Asia, and says it has as many as 250 customers. The company recently moved its headquarters from Santa Clara, California to Malta and New York, but Abu Dhabi’s state-owned Mubadala Investment Company owns 80% of the company.
Taiwan tries to show itself as a neutral chip supplier and one of the world’s largest chip manufacturers (Reuters)
Is the United States self-defeating?
In 2019, the United States tried to restrict China in the semiconductor field to prevent it from acquiring the technology needed to build a 5G network.
On the other hand, Taiwan has been trying to show itself as a neutral chip supplier, especially since it has one of the world’s largest chip manufacturers.
However, it finds itself constantly being drawn into the competition between China and the United States. For example, the U.S. sanctions against China’s leading smartphone manufacturer Huawei prevented Huawei from buying chips from TSMC.
China quickly took action, hoping to build its own advanced chip factory on Chinese soil, while the administration of former US President Donald Trump called on TSMC to establish an American chip manufacturing plant in Arizona.
It now appears that underestimating foreign acquisitions of dangerous industries such as semiconductor technology, the United States will lose its bet on technological progress.