Reshoring Vital To The Future Of Chipmaking

Repatriating offshore manufacturing efforts to the United States – i.e., “reshoring” – is not a new concept. The Reshoring Initiative was founded in 2010, and the Reshoring Institute, founded in 2014, conducts annual surveys of global manufacturers regarding their reshoring plans. The institute’s 2019 survey found that, while a growing number of businesses were rethinking their global manufacturing strategies, several key factors were causing them to delay reshoring efforts – 50% cited having no current U.S. facility.

Since then, several major wafer manufacturers, including GlobalFoundries, Intel and TSMC, have publicized plans to implement or greatly expand their wafer fabrication capabilities in the U.S. These efforts support the revival in U.S. manufacturing indicated by a Thomas industrial survey publicized last May, just a few weeks after the onset of COVID-19. The pandemic necessitated shutdowns that significantly disrupted the global supply chain and, by extension, the chip manufacturing industry. While these bottlenecks have eased to a degree, the situation brought to the forefront the reality of how easily the supply chain can be corrupted by factors that we can’t foresee or control.

Concentrating more manufacturing in the U.S. would enable better control over the flow of supplies, with fewer variables to navigate. A key challenge when shutdowns occur in other countries is, of course, transportation and freight logistics – simply getting parts and materials where they need to be, in a secure manner, isn’t so simple when shipments are being delayed by weeks or longer.

In QP Technologies’ case, while some of our supply chain is located offshore, we deal primarily with suppliers whose own supply chains are very strong, so we’ve haven’t experienced shortages or delays during the pandemic. Having an established presence as a leading U.S.-based provider of microelectronic packaging and assembly capabilities, we are well positioned to take advantage of the reshoring movement – particularly with our 300mm wafer processing capabilities and our wide range of package/assembly offerings.

Last month, as part of a petition initiated by the Semiconductor Industry Association, more than 20 top U.S. chip executives signed a letter urging President Biden to boost funding for domestic chip manufacturing. The letter stresses the importance of making it more affordable for companies to build wafer fabs to help the U.S. regain ground in the global chip manufacturing market. The President subsequently announced plans to seek $37 billion in funding for legislation and signed an executive order aimed at addressing the global semiconductor chip shortage, which will, in turn, create new jobs and help boost the late- and post-pandemic economy.

Meanwhile, business does go on and we envision substantial growth in the year ahead for  many sectors of our business and for the semiconductor industry overall. Markets such as the military-aerospace sector (which must work with onshore providers due to security considerations) are finding new opportunities to deploy our products, such as our patented air-cavity packages, to speed development and time-to-market for their devices.

We continue to follow the reshoring movement closely, and we will be interested to see what emerges as the government funding effort to invigorate U.S. chip manufacturing progresses.