New Survey:  Semiconductor Market Hampered by Demand/Supply Mismatch, Lack of Manufacturing Capacity

Arch Street

The U.S. Department of Commerce (DoC) released the results of a request for information (RFI) seeking data on the state of the semiconductor supply chain.

The DoC confirmed that there is a significant, persistent mismatch in supply and demand for chips, and survey respondents did not see the problem going away in the next six months. Median demand for the chips highlighted by the buyers who responded to the RFI was as much as 17% higher in 2021 than in 2019, and buyers aren’t seeing commensurate increases in the supply they receive.

The main bottleneck identified is the need for additional manufacturing or fab capacity. In addition, companies identified material and assembly, test, and packaging capacity as bottlenecks.

The RFI received more than 150 responses, including from nearly every major semiconductor producer and from companies in multiple consuming industries.

Other findings include:

  • The median inventory of semiconductor products highlighted by buyers has fallen from 40 days in 2019 to less than 5 days in 2021 (see Figure 2). These inventories are even smaller in key industries.
  • The RFI allowed us to pinpoint specific nodes where the supply and demand mismatch is most acute, and we will target our efforts moving forward on collaborating with industry to resolve bottlenecks in these nodes.
  • The primary bottleneck across the board appears to be wafer production capacity, which requires a longer-term solution.

DoC urged passage of semiconductor legislation pending in Congress — the United States Innovation and Competition Act (USICA) including $52 billion in funding to support domestic chip manufacturing.  That legislation remains stalled due to disagreements between the House and the Senate as well as a slowdown in annual appropriations across all agencies.

The State of U.S. Science and Engineering 2022

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National Science Board S&E Indicators

The U.S. National Science Board has released their biennial report on the U.S. science and engineering (S&E) enterprise. The NSB Science & Engineering Indicators study is a key source of data on the status of U.S. R&D and STEM workforce investments and activities. The report analyzes the overall levels of investment in R&D at all levels (basic/applied/development) by all performers (academic/industry/non-profit/government) and source of funds (government/private/non-profit). It also compares and contrasts the performance of the U.S. with other countries.

Key findings include:

  • Global research and development (R&D) performance is concentrated in a few countries, with the United States performing the most (27% of global R&D in 2019), followed by China (22%), Japan (7%), Germany (6%), and South Korea (4%).
  • The global concentration of R&D performance continues to shift from the United States and Europe to countries in East-Southeast Asia and South Asia.
  • Many middle-income countries, such as China and India, are increasing science and engineering (S&E) publication, patenting activities, and knowledge- and technology-intensive (KTI) output, which has distributed science and technology (S&T) capabilities throughout the globe.
  • The proportion of total U.S. R&D funded by the U.S. government decreased from 31% in 2010 to an estimated 21% in 2019, even as the absolute amount of federally funded R&D increased. This translates into the weakening of the U.S. system of basic research which has long been a pillar of a strong U.S. S&E enterprise.
  • The U.S. science, technology, engineering, and mathematics (STEM) labor force represents 23% of the total U.S. labor force, involves workers at all educational levels, and includes higher proportions of men, Whites, Asians, and foreign-born workers than the proportions of these groups in the U.S. population.
  • Blacks and Hispanics are underrepresented among students earning S&E degrees and among STEM workers with at least a bachelor’s degree. However, their share of STEM workers without a bachelor’s degree is similar to their share in the U.S. workforce.
  • Disparities in K–12 STEM education and student performance across demographic and socioeconomic categories and geographic regions are challenges to the U.S. STEM education system, as is the affordability of higher education.
  • The United States awards the most S&E doctorates worldwide. Among S&E doctorate students in the United States, a large proportion are international and over half of the doctorate degrees in the fields of economics, computer sciences, engineering, and mathematics and statistics are awarded to international students.

This year the report marked significant changes to how it analyzes the science, technology, engineering and mathematics (STEM) workforce. It combines two major component into total STEM workforce: (1) S&E and S&E-related workers with a bachelor’s or higher degree and (2) skilled technical workers (STW) without such a degree.

Industrial Policy — Can the U.S. Find Consensus, Consistency?

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U.S. industrial and attendant technology policy has a long and tortured existence often rising and falling in a decadal threat cycle: communism in the 50’s/60’s, oil shocks in the 1970’s, and the rise of Japan in the 1980’s. For many years starting in the 1990’s, the term “industrial policy” was considered verboten, off-limits in policy circles especially among free-market Republicans who preferred to let market forces drive technology investments. This led to a whip-saw effect, U.S. technology initiatives would flourish in times of threat, then languish and die as the U.S. defaulted to market forces alone. Unfortunately, while market forces are highly efficient and effective in picking winners and losers, this process has left the U.S. vulnerable, as the market for critical technologies (and their attendant supply chains) globalized.

With these shifts becoming apparent in the past few years, Robert Atkinson of the Information Technology and Innovation Foundation (ITIF) is out today with a new white paper on Strategic Industrial Policy. Because of an increasing reliance on sophisticated globally-sourced dual-use technologies such as semiconductors, Atkinson argues that the United States should adopt what he terms a Strategic-Industrial Policy. In the white paper, Atkinson attempts to refute the standard arguments against industrial policy — picking winners and losers, focus on high profile failures, politicization risks — while arguing that the threat from China to both U.S. economic and national security demands a new approach to U.S. industrial policy.

AFRL Information Directorate to Hold “Ask Me Anything” Session on Upcoming BAA

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The Air Force Research Laboratory — Information Directorate (AFRL-RI) will hold a virtual “Ask Me Anything” informational session the upcoming AFRL-RI Broad Area Announcement on Tuesday, December 7, 2021.

Session attendees will receive an overview of ten BAA topics in pre-release on Wednesday, December 1, an outline of the timeline for proposal submission, and the funding opportunities. Participants will have a chance to ask questions and have them answered live by the topic authors, technical professionals, and a representative of the U.S. Air Force SBIR/STTR office.

Click here to register

Webinar: IBM’s Discovery Accelerator Partnerships

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On December 9, 2021 at 1:00 EST, the National Academy of Sciences, Engineering and Medicine – Government-University-Industry Research Roundtable will convene a webinar to discuss the strategic goals and impact of IBM’s Discovery Accelerator Partnerships. Within the last year, IBM announced two significant partnerships that will deploy emerging technologies and advanced capabilities aimed at driving scientific discovery – the first, a ten-year partnership with Cleveland Clinic focused on discoveries in life sciences and healthcare; and the second, a five-year partnership with the United Kingdom’s Science and Technology Facilities Council, based at the Hartree National Center for Digital Innovation, which will drive innovations in life sciences, new materials development, environmental sustainability, and advanced manufacturing.

During this webinar, IBM officials discuss the Discovery Accelerator approach to partnership, collaborative and interdisciplinary research, and the application of emerging computing technologies to supercharge the pace of scientific discovery.

Click here to register

Communicating the Value and Impact of Technology Transfer

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The Technology Transfer Society, DC Chapter will be holding an online presentation on how to better communicate the value and impact of technology transfer. A recent article in Issues in Science & Technology entitled Settling for Second Place? by former Lockheed Martin CEO Norm Augustine and former NSF Directorate Dr. Neal Lane sounded the alarm that America’s world leadership in science and technology is being challenged like never before.

While many focus on basic and applied research investments, technology transfer and commercialization activities — bridging the technology ‘valley of death’ from scientific discovery to commercial product — have become pivotal to capturing the value of R&D at universities, national laboratories and industry labs. Unfortunately, tech transfer efforts are often misunderstood and poorly resourced at many major S&T institutions. The presentation will address how to better communicate the value of these functions to key decisionmakers to help them better understand the growing value of technology transfer beyond patent licensing.

GAO Study: Quantum Computing and Communications

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The Government Accountability Office (GAO) recently conducted a study on the future of quantum computing and communications. The authors noted that while some quantum technologies are available for limited uses today, it will likely take at least a decade and cost billions to develop quantum technologies for more complex uses. As part of its assessment, GAO looked at (1) the availability of quantum computing and communications technologies and how they work, (2) potential future applications of such technologies and benefits and drawbacks from their development and use, and (3) factors that could affect technology development and policy options available to help address those factors, enhance benefits, or mitigate drawbacks.

GAO identified four factors that affect quantum technology development and use: (1) collaboration, (2) workforce size and skill, (3) investment, and (4) the supply chain. The study found that the United States led the world in the number of scientific and technical papers in quantum computing with China a close second. China leads in the production of papers in quantum communications.

The full GAO study can be found here.

Workshop: NIST Artificial Intelligence Risk Management Framework

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The National Institute of Standards and Technology (NIST) is developing a framework to better manage risks to individuals, organizations, and society associated with artificial intelligence (AI).

The Framework will be developed through a consensus-driven, open, transparent, and collaborative process that will include workshops and other opportunities to provide input. It is intended to build on, align with, and support AI risk management efforts by others.

NIST’s work on the Framework is consistent with its broader AI efforts, recommendations by the National Security Commission on Artificial Intelligence, and the Plan for Federal Engagement in AI Standards and Related Tools. Congress has directed NIST to collaborate with the private and public sectors to develop the AI Framework.

The on-going NIST effort aims to foster the development of innovative approaches to address characteristics of trustworthiness including accuracy, explainability and interpretability, reliability, privacy, robustness, safety, security (resilience), and mitigation of unintended and/or harmful bias, as well as of harmful uses. The Framework should consider and encompass principles such as transparency, fairness, and accountability during design, deployment, use, and evaluation of AI technologies and systems. These characteristics and principles are generally considered as contributing to the trustworthiness of AI technologies and systems, products, and services.

A initial virtual workshop to enable expert participation from industry, academia and government will be held on October 19-21.

Investing in Rural Prosperity — New Approaches

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Rural communities throughout the United States are vibrant places, with great people, rich culture and heritage, and deep social ties. But recent structural changes to the economy, along with long-term challenges, have left many in these communities at a crossroads, wondering which direction will lead to prosperity for all.

Investing in Rural Prosperity, a forthcoming book from the Federal Reserve Bank of St. Louis and the Federal Reserve Board, seeks to help people living in rural areas navigate the challenges and opportunities they face to reach a future in which economic prosperity is a reality.

Chapter 9 is available in advance on the St. Louis Fed’s website.  It outlines a new framework for fostering shared economic prosperity in rural communities. The authors’ proposed approach to rural development—abbreviated with the acronym “TRIC”—is tailored to the specific goals, assets and organizational infrastructures of communities. It is designed to be resilient in changing circumstances; inclusive about who is at the decision-making table and who benefits from local development; and promotes a collaborative process. The chapter explores each of the principles in the TRIC framework, including their meanings, their interconnectedness and interdependence, and their ability to inform and shape rural development.

For more information see:  Federal Reserve Bank of St. Louis –  The “TRIC” to Fostering Shared Economic Prosperity in Rural America