Fixing the U.S. Semiconductor Supply Chain

One of the lingering effects of the Covid-19 pandemic is the global shortage of semiconductors. It has triggered governments and companies actions to prevent such shortages from occurring again. But research conducted by MIT and Denso revealed that expanding the number of semiconductor fabrication facilities in the United States will not alone suffice. Other steps that are needed to tide over users and prevent similar shortages in the future include: focus on resiliency, not just production capacity; don’t just focus on advanced chips; take steps to make the most of existing supplies; and establish common chip standards.

The persistent global shortage of semiconductors has prompted governments and chip manufacturers around the world to take actions to expand production and prevent such shortages from occurring again. But in formulating their plans, they should include measures to ensure that future supply chains for computer chips are resilient. A study that we conducted with DENSO, a global automotive component manufacturer whose headquarters are in Japan, highlighted how vulnerable the semiconductor supply chain is to disruptions. We found that a short disruption of a semiconductor fabrication facility, or “fab,” in Taiwan for 10 days, could cause a flurry of additional disruptions across the entire supply chain that would last almost a year.

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https://hbr.org/2022/10/fixing-the-u-s-semiconductor-supply-chain