The US can shape the future of semiconductors if Congress thinks ahead

Spurred by strained supply chains, growing concerns about China, and the landmark CHIPS and Science Act Congress enacted last summer, U.S. semiconductor manufacturing seems poised for a renaissance. 

News of chip manufacturing facilities slated for Ohio, upstate New York and most recently Arizona should buoy all Americans for their promise of good new jobs and because these factories will make us less dependent on others for the chips that are the building blocks of most modern products, from phones to automobiles.   

Important as they are, however, these new factories will mainly serve to increase access to current chips, including those manufactured with state-of-the-art technologies. While that’s vital, it’s a short-term solution. To secure national leadership and prosperity over time, the U.S. needs to be the birthplace of the new ideas that will determine the future — including the future of semiconductor technology, design, and manufacturing. Guaranteeing that future requires swift federal action. 

The semiconductor industry does not stand still; there is a perpetual race to advance chip capability. When it comes to chip fabrication, U.S. companies need to regain their lead. In chip-making equipment, the U.S. needs to retain its premier position. In design, the U.S. still leads but faces intensifying competition from China and elsewhere.   

Advancing all aspects of the chip-making process — from design to manufacturing at scale — increasingly requires not just incremental improvements, but fundamental leaps to overcome the physical limitations on how many transistors can fit on a chip and on how many chips can fit on a package and a circuit board — both keys to increasing product capability.     

In other words, no matter how many chip factories are built on U.S. soil, we will still be caught in a trap of dependence on other’s technologies unless the nation acts to lead in creating the next generations of chips. Retaining our leadership in design and technology equipment will help attract more chip manufacturing to the U.S. because having state-of-the-art design, technology and manufacturing close together creates a powerful feedback loop for rapidly advancing innovation.   

So what can the U.S. do to spark the next revolutions in advanced technologies, including chip technology and design, here at home? A critical element is adequately funding science and engineering research at universities, a wellspring of many breakthrough ideas.

As president of MIT, I am continually astonished by the new technologies emerging from our labs — and often spun off as new companies. While companies know how to make important improvements in technology and how to manufacture at scale, their understandable focus on the bottom line and the next product cycle can keep them from exploring the boldest ideas. University researchers and graduate students are less encumbered, giving them the freedom to be more visionary. 

This is where Washington comes in. The federal government is the primary funder of university research; corporations are part of this ecosystem, but they are generally inclined to support research geared to shorter-term results and relatively rapid commercialization.  

The U.S. is unlikely to be the leader in advancing frontier technologies if the government does not invest now in enabling universities to undertake the use-inspired research that will seed future innovations. Congress recognized that in the bipartisan CHIPS and Science Act, which pledged to significantly increase the U.S. investment in science over the next five years. 

Unfortunately, it is a pledge that remains unfulfilled. While the CHIPS law provided actual funding to help underwrite the cost of new factories and the shorter-range, university-industry research needed to secure near-term success, for the scientific work that will feed future breakthroughs, Congress provided nothing more than an IOU.  

That can be corrected right now. Congress is currently preparing to vote on the omnibus spending bill, which includes initial funding to start making good on the pledge. It should take this opportunity to provide a downpayment on the funding needed to retain U.S. scientific leadership. In the scope of the federal budget, that funding is relatively small — but it would have an outsized impact: To protect future U.S. prosperity and national security, this is the moment to invest in the research to create the next generations of semiconductors and other pioneering technologies such as artificial intelligence and quantum computing (both of which depend on advanced chips).  

The competition to be the leader in creating the next generations of advanced technologies is ours to lose. The U.S. has most of the world’s top research universities, the leading semiconductor design and equipment companies, reviving interest in technology and manufacturing and — equally important — a growing realization among policymakers of how much is at stake.   

What’s still needed now is the actual investment in the far-reaching research critical to taking full advantage of these strengths — the fuel to drive this powerful engine of American ingenuity.  Congress can act now to start ensuring that the U.S. has the complete set of policies and the funding on board to regain and retain its winning spot in the race for semiconductor leadership for decades to come.   

Rafael Reif is the president of the Massachusetts Institute of Technology.