Worried about China, the US pushes for homegrown chip development

The White House has established the Semiconductor Working Group to encourage semiconductor development

The world's fastest computer runs a Chinese chip, and that fact hasn't escaped notice by the U.S. government.

So how does the U.S. government bludgeon the Chinese chip threat? A new U.S. government working group aims to encourage domestic companies to use homegrown chip technology and resist the urge to buy inexpensive Chinese semiconductors.

The White House this week established the Semiconductor Working Group, a private-public advisory group that will create policy and research guidelines for semiconductor development. The ultimate goal is to retain U.S. leadership in semiconductor technology.

Nations are waging a battle to build the world's fastest computers, and homegrown chips are at the center of that race. Supercomputers help with economic projections, weapons development, scientific simulations, and scenarios critical to national security.

Advanced semiconductors will also drive the development of self-driving cars, robots, drones, and satellites. Semiconductors are building blocks for most electronics.

"A loss of leadership in semiconductor innovation and manufacturing could have significant adverse impacts on the U.S. economy and even on national security," said John Holdren, director of the White House Office of Science and Technology Policy.

The working group is also encouraging the development of new types of computers. Companies are already developing quantum computers and chips mimicking brain functionality, which could eventually replace today's PCs and chips.

Without mentioning China, Holdren said some countries subsidize chip development and dump inferior technology on U.S. companies. That hurts the development of new semiconductor technology, he said.

"Such policies could lead to overcapacity and dumping, reduce incentives for private-sector research and development in the United States, and thereby slow the pace of semiconductor innovation and realization of the economic and security benefits that such innovation could bring," Holdren said.

The call for national cooperation in semiconductor development is timely. Researchers believe that Moore's Law, a guiding light for the semiconductor development cycle codified by Intel co-founder Gordon Moore, is coming to an end, creating an opportunity to rethink chip design.

But technological challenges are holding back chip advances. It's becoming difficult to cram more features on smaller chips, and adoption of new materials and manufacturing technologies are progressing at a slow pace.

Major chip companies IBM and Intel have their own ideas of what future PCs and servers will look like. One goal is to bring uniformity into semiconductor development so that large and small U.S. companies can benefit alike.

The U.S. government may have its own interests in mind. U.S. companies sell chip technology to China, but the government has blocked some sales in the name of national security. Last year, the U.S. government blocked Intel from selling its Xeon chips for China’s supercomputers, reflecting concerns they could be used in supercomputers related to "nuclear explosive activities."

The Semiconductor Industry Association, which boasts major chip companies as its members, applauded the formation of the working group, saying it was long overdue.

"The chip industry spawns new industries, makes existing industries more productive, and drives advances once never imagined," said John Neuffer, president and CEO of SIA.

The U.S. is creating faster supercomputers and has efforts to develop new computing technologies through the Brain Initiative, the Advanced Manufacturing Initiative, the National Nanotechnology Initiative, and Computer Science for All, which promotes technology education. Many other technologies are developed by private sector companies or academic institutions.

It's unclear how effective the advisory group will be, but it'll likely have little impact in creating new semiconductor and computing technologies, said Jim McGregor, principal analyst at Tirias Research.

This task force is being established just as U.S. President Barack Obama leaves office, and it may be scrubbed by the time the new president takes over.

Moreover, little gets done in the U.S. government, and the working group won't change the way companies like Intel and IBM develop technologies or do business, McGregor said.

The U.S. government needs to invest more heavily to assert its influence and drive technological change, McGregor said. The nominal U.S. government investments in technological development come through organizations like the National Science Foundation and the Defense Advanced Research Projects Agency.

By comparison, China, South Korea, and Taiwan have centralized organizations that help consolidate IT and drive technological education, McGregor said.

The working group should instead prioritize promoting STEM (science, technology, engineering, and math) education and retraining the workforce for homegrown semiconductor development, McGregor said. A lot of chip development for companies like Intel and AMD are exported to countries like India, China, and Israel.

Prominent members of the Semiconductor Working Group include Qualcomm chairman Paul Jacobs and former Intel CEO Paul Otellini.

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