By Daniel McGroarty, TES GeoPolicy Editor
Let the Great Re-Shoring begin: One of the many ways the COVID pandemic will change the behavior of nations is coming into view, with profound implications for the globalization of trade, and where we make what we buy. With China controlling the chokepoint on medical devices from ventilators and N-95 masks to all manner of prescription drugs, the U.S. is waking up to the dangers of supply chains outside of our control.
Hence the cheering at this month’s announcement that Taiwan Semiconductor, specialty chip supplier to Apple and many other tech giants, will build a next-gen semiconductor factory in Arizona to manufacture their new 5nm — 5-nanometer — chips. Construction is slated to begin next year, creating 1,600 jobs at a total investment of $12 billion. Reports indicate that the U.S. Departments of State and Commerce are involved, meaning the move is part of the post-pandemic “de-coupling” from China.
For Taiwan Semi, the new Arizona plant is another link in its evolving U.S. supply chain, joining the company’s fabrication factory in Washington state and design centers in California and Texas.
High-Speed Computing’s Next New Thing
5nm is the next new thing in high-speed computing. As experts with the Institute of Electrical and Electronics Engineers explain, for all of the dizzying increases in computing power, not much has changed since the invention of the semiconductor: “the metal oxide semiconductor field-effect transistor, or MOSFET—the kind of transistor used in microprocessors—has included the same basic structures since its invention in 1959.” What’s changing now is the engineering of the basic gating structure that channels the flow of electrons across the chip. On the 5nm platform, “Electrons can move more than 10 times as fast in some of these semiconductors, allowing transistors made from these materials to switch faster. More important, because the electrons move faster, you can operate the device at a lower voltage, which leads to higher energy efficiency and less heat generation.”
Little wonder 5nm chips have captured the interest not only of Apple and the tech sector, but the Pentagon as well.
What gives 5nm its secret sauce? Like gastronomes blending obscure spices, 5nm’s designers looking to push the limits of Moore’s Law have turned to a broader swath of the Periodic Table of Elements to expand their computing palate. Starting with the familiar silicon substrate “wafer,” 5nm layers in exotic elements like silicon germanium for its super-lattice, adding dielectric hafnium-dioxide and gallium arsenide laced with indium – with a side-look at gallium antimonide as a potential substitute.
And that’s where things get difficult, at least if we’re rooting for the U.S. to become the world’s epicenter of 5-nanometer chip production: The U.S. produces precisely zero of three of these elements — indium and gallium and arsenic – leaving us 100% import-dependent, while we’re 84% import-dependent for antimony, and more than 50% for germanium. Data for hafnium, among the rarest of the elements, is notoriously harder to come by, with production guesstimated at a scant 70 tons per year.
So if the U.S. is not producing these 5nm materials, where do these essential ingredients come from?
China is the global leader or top U.S. supplier for all six.
Supply Chain Starts With Supply
It’s a harsh reminder that the first word in supply chain is “supply.” And given that Beijing is not too happy about Taiwan Semi joining the 5nm U.S. supply chain team – after Apple, banned-in-America Huawei is Taiwan Semiconductor’s biggest customer — it may not be a good idea to source key semi-conductor materials from China. We’ve already seen Beijing threaten to cut off rare earth supplies to the U.S. as part of their trade war strategy. Do we need to multiply U.S. vulnerability across another half-dozen metals and minerals essential to next generation high-speed computing?
It doesn’t have to be that way: The U.S. has “known resources” of all six, and already includes them on the U.S. Government Critical Minerals List. Are the U.S. sources economic? Not if U.S. laws governing resource development policy make it a decade long odyssey to bring new resource projects into production. All the tax breaks in Arizona won’t help Taiwan Semiconductor if U.S. policy fails to take seriously America’s critical mineral dependency on China.
What can the U.S. Government do to bridge this resource gap and encourage American production? Here’s a place to begin: Decades ago, Congress gave the president authority to invoke the emergency powers of the Defense Production Act (DPA) – which President Trump has done during the COVID pandemic, and did last summer to address the United States’ rare earths dependency. If it’s dangerous for the U.S. to be 100% import-dependent for rare earths when the leading global producer is China, why not extend the same DPA designation to the other seven metals and minerals – not just the indium, gallium and arsenic we need for 5nm chips, but graphite, tantalum, fluorspar and manganese – where U.S. dependence is also 100% and China dominates global supply?
There’s no question that Taiwan Semi’s engineering team has the expertise to make its next-gen chip a reality. The question concerns the stuff their dreams are made on. Will the U.S. act in time to secure reliable supply of 5nm materials, or will mineral and metal availability become the new “single point of failure” – subject to some future cut-off ordered by Beijing or disrupted by the return of COVID 2.0 — that will render the new Arizona chip investment inoperative?
That’s not a question of science or engineering or who boasts the best single atomic layer deposition techniques. It’s a question of political will. And if the ultimate goal is to reshore American control over our economic destiny and national security, the answer is due right now.
Daniel McGroarty is principal of Carmot Strategic Group Inc., a Washington, D.C.-based advisory focused on critical minerals. He served at senior levels at the White House and Pentagon, and has testified on rare earths and critical minerals issues in the U.S. House and Senate.