One of the things that are missing from virtual events is the candid conversations we engage in when we meet up with industry colleagues in the halls and cocktail receptions at in-person events. In a way, that’s the tone we’re trying to capture in the conversations we have on the 3D inCites podcast.

I feel like we accomplished this in our recent episode, A Conversation About Reshoring Advanced Packaging in the U.S., which features 3D InCites Community Members. Bob Patti, of Nhanced Semiconductor, Alan Huffman, of Micross, and Dick Otte, of QP Technologies.

Our conversation covered a wide range of questions such as will the $52 billion be enough to bring the US back into the driver’s seat of the semiconductor industry? How should those funds be best allocated? What will the impact be on small entities? Where will the workforce come from? How do we ensure that Foundry 2.0 adds IP value and attracts new talent? Is the answer a vertically integrated advanced packaging company? Should we create a private/public partnership consortium of advanced packaging companies and use the government funding to fill in the gaps? Are we in danger of over-capacity?

The answers may surprise you. There were some I didn’t expect. I recommend that you take the time to listen to the full conversation – you’ll feel like a fly on the wall and will want to jump in and take part. To whet your appetite, here are some snippets of the conversation that stood out to me  – let’s call it the Sparks Notes version.

Is $52 Billion Enough?

A one-time infusion of $52 billion is not going to be enough. We need ongoing programs to achieve what we need if we want to reinstate global leadership in semiconductor manufacturing.

“$52 billion is great. What would be better is a consistent policy that looked forward over a decade of how we’re going to continue to grow and induce the industry to stay onshore,” said Bob.

“It’s a waste of money if it’s a one-time thing,” added Dick. “So, the question is, how do you invest those funds, in the long run, to achieve significant progress in the next, roughly three to five years?”

“It should be viewed as the beginning of a megatrend where the United States has a more relevant role to play across the entire microelectronics spectrum,” noted Alan, adding that the pandemic has shown us that we need to have additional supply chain and supply chain sources if we’re going to continue supporting just-in-time delivery.

“I’m hoping that it becomes a long-term change, not a one-off: here’s a big pot of money. My concern is it gets consumed by a small handful of companies, and two years from now, everybody forgets, and they go back to offshoring again,” said Bob.

What’s the Risk of Over Capacity If the Government Subsidizes Chip Manufacturing?

Critics of the chip subsidies question the need to throw billions of taxpayer funds at a profitable industry and warn that the incentives arms race could create a glut of production. This was not something this group was concerned about. Patti noted that Intel, Samsung, TSMC, GlobalFoundries, and others tend to be conservative and aren’t likely to go out on a limb to build a lot of capacity unless they have it tied up in orders. He even questions whether all the fabs that are planned will actually happen.

“I think that right now it’s in vogue to talk about onshoring and announcing, but you know, there’s a lot of time between now and when that happens, I think a lot of these companies are queuing up to be in line for some of the money that’s going to be available,” he said.

How Much is Influenced by China?

Historically, the U.S. government hasn’t felt the need to incentivize high-tech companies to come to the US. Just being the U.S. was supposed to be enough. But now, Bob notes, the “rise of China” and “continuous leak of high tech offshore,” has the US government concerned from a strategic and military perspective.

And speaking of national security, Dick addressed the elephant in the room: What happens if China invades Taiwan?

“I think building these capabilities onshore, so we are less dependent on Asia, gives us greater independence and less incentive to go to war if China invades Taiwan… it seems to me inevitable that there’s going to be a conflict over Taiwan. And that’s the day that we lose access to semiconductors out of Asia, and the current semiconductor shortage looks like a picnic compared to the mess we’re going to have,” he said

What’s the Best Use of the Funds and Incentives?

Alan predicted that in the name of “national security” much of the funding will go to major foundries to onshore advanced chip manufacturing, but that those in the packaging business are wondering how the advanced packaging that all these chips need will take place.

“You’re going to spend $5 billion to put a new leading-edge fab facility on the ground. You can do that with a leading-edge advanced packaging facility for a fraction of that cost,” noted Alan.

Giving the lion’s share of the funding to the major foundries for new chip development, versus allocating a good share to building or expanding leading-edge advanced packaging capabilities onshore is misguided. But this is what’s likely to happen, explained Bob, because of the lobbying resources large companies can tap into.

Dick pointed out that onshoring conventional packaging will be tricky, because of the cost competitiveness with Asia, where most, if not all, high volume conventional packaging happens. He suggests that we focus on building a strong foundation in the emerging technologies for packaging, like chiplets, and we protect and defend that through government subsidies to some of the smaller companies who traditionally pioneer these types of new technologies.

One thing is certain – manufacturing advanced node technologies onshore and then shipping them offshore for the advanced packaging just doesn’t make sense.

How do We Staff These Solutions?

One of Dick’s greatest concerns for US onshoring isn’t about where the money’s going to come from or how it should be allocated. It’s where we’re going to find the technical talent to support it. “The younger generation all wants to do things in software. And the reality is, enhanced packaging and semiconductors are a physical hardware kind of thing. And that, for whatever reason, it’s kind of out of favor as a career direction.” he said. “We have to do something as an industry, as a culture, even to get more enthusiasm for the younger generation to move into this physical space.”

Bob’s solution is to foster and fund the Foundry 2.0 concept, and the development of chiplet technology. “It’s what creates those slots for talent in the marketplace,” he said. “Training a bunch of people to be semiconductor technicians today I’m not sure is the best investment because the fabs become more and more automated.”

What Should Onshoring Advanced Packaging Look Like?

Dick proposed building a vertically integrated packaging company that builds its own “everything” from substrates, and polymers to bond-wire, and process equipment. Bob and Alan see a more public/private partnership consortium where government funding is used to fill in the gaps.

Bob is also concerned that if all the money is invested in chip manufacturing, the risk adverseness of this industry will prevent the expansion of the More than Moore technologies, which he says is the future. The businesses that he, Dick, and Alan are in – developing advanced packaging for emerging technologies – is where the risk is in the semiconductor industry.

Bob calls his vision for More than Moore innovation, Foundry 2.0. “I’m a strong believer that we’re going to see a bifurcation in the industry to Foundry 1.0, which is entirely driven by cap-ex and Foundry 2.0, which is driven by advanced packaging chiplets: by fundamental innovation. And this shift in the semiconductor business is going to be revolutionary,” he said. “As we go through this process of onshoring, it’s very important that we recognize what we need to onshore to make sure Foundry 2.0 happens. This is where the growth is going to be. It’s where the intellectual property value is.”

“If we don’t invest in that today, I know China is investing in this kind of work. They have gone to it because it was a way to get around a lot of the rules, the regulations, their lack of onshore capability, they’re going to promote it.”

So much more was said in this discussion. You can listen to the entire episode below, or wherever you get your podcasts – including Apple Podcasts, Spotify, Google, and more. Take it on your next walk, run or drive. Let us know what you think!

is $52 Billion enough?


Francoise von Trapp

They call me the “Queen of 3D” because I have been following the course of…

View Francoise's posts

Become a Member

Media Kit