A perfect storm of challenges, including a global pandemic, a trade war, floods, flooding, and snowstorms, has resulted in a computer chip crisis around the globe. Chips are now used in everything from watches to refrigerators, and your car most likely has several dozen. Manufacturers clearly cannot keep up with demand. What is behind the scarcity?

1. Semiconductor the
New Oil Imperative?
Presented by
Anurag Pandey, Harsh Chitroda &
John McGuire

2. Semiconductor Industry
The semiconductor industry manufacturers integrated
circuits (“chips”) for a variety of electronics, including
computing devices, network equipment, and storage
devices. The rise of new technological advancements such
as autonomous vehicles, big data analytics, edge
computing, immersive devices (e.g., virtual reality), internet
of things, machine learning, robotics, and so on are not only
requiring more chips but continually more advanced chips.

3. Semiconductor and Moore’s Law
The publication of Gordon Moore’s seminal article
in Electronics Magazine, which laid out the pace at
which semiconductor technology advancement
would occur. This observation, which has come to
be known as “Moore’s Law,” states that the number
of transistors on a semiconductor would double
every two years, thereby rapidly increasing the
functionality of semiconductors and the electronic
products they enable.

4. Semiconductor The New Oil ?
HIGH VALUE semiconductors, which are defined as five
nanometres (billionths of a metre) or less in size, have become
the new oil, for the workings of the global economy.
Semiconductors will, in fact, become even more important as
the age of oil comes to an end and as digitalisation and
artificial intelligence progress

5. Geo-Political Issues
• Semiconductors represent the linchpin for U.S. and China’s
mutually dependent technological ambitions.
• Despite massive investment, China is highly unlikely to
achieve independent semiconductor manufacturing
capabilities in the next five to 10 years.
• Taiwan is set to become the center of U.S.-China tensions.
• Unilateral restrictions fostering distrust among companies
and country governments risk economic decoupling.
• Collaboration between the Biden administration and
American corporations will be key to balancing national
security and commercial interests.

6. China’s Share of Global Chip Manufacturing to
Nearly Double by 2030

7. Asia Projected to Capture Nearly
All Manufacturing Growth
2019 – 2030 Installed Global Wafer Capacity Projection

8. Challenges in the
United States
• Failure to offer comparable support
• Insufficient incentives when compared to other
Countries
• No significant cash grants or subsidies .

9. As a percentage of GDP, semiconductor and Related Research has
reminded flat over the past 40 years, while private Industry investment has
increased 10 folds

10. Incoming Domestic Policy
Biden administration’s $2 trillion infrastructure plan
• Calls for $50 billion to be invested in domestic
manufacturing and R&D
Includes:
• 40% refundable investment tax credit for qualified
semiconductor equipment or facility expenditure.
• $10 billion federal program to grant incentives for
qualified companies building foundries.

11. Justifying & Quantifying the Investment
● Why U.S.-based semiconductor chip manufacturing is crucial.
● The supply chain bottleneck creating contagion in the U.S.

12. The Supply Chain Crisis
• Semiconductors power our modern world.
• How it started.
• Auto industry the first to feel the squeeze of chip
shortage.
• A looming national security crisis for the U.S.
• Not letting a supply chain crisis happen again.

13. Effects on GDP / Macro
GDP
• Significant federal R&D
contribution would add a
cumulative $2.14 trillion
to U.S. GDP by 2029.
Jobs
• Incremental job creation
totaling ~500,000 in the
next 10 years.
Technology
• Government funding will
increase the drive of
innovation in key
technologies for the
future.

14. Tech Cold Wars
• Disruption of global supply chain
• Export restrictions
• US government pushes for onshoring
• Grants & Incentives
• Smaller players feel the pinch

15. Chipless: U.S. Lacking, China Demanding

16. Role of Organizations
• Enactment of federal investments
• Guarantee a level global playing field
• Promote global trade and international
collaboration
• Step up efforts to address the shortage
• Stable, and targeted framework
controls on semi
• Landmark agreements (TRIPS, ITA, SCM)
• Protect discriminatory and market-distorting
practices
• Negotiating and updating the global trade
rules

17. Summation
The Fed government needs to step in and infuse the
semiconductor industry so they can continue unabated at
light speed. If this is not done, we risk a serious economic
slowdown, again due to the shortage being a self-
accelerating problem.
• The shortage will be persistent
• Rising costs for the end users

18. Thank You

19. References
• Semiconductors and the U.S.-China Innovation Race
• China Turns Semiconductors Into The 'New Oil' While GM
Runs Out Of Chips
• Semiconductor Definition
• STRENGTHENING THE US SEMICONDUCTOR
INDUSTRIAL BASE
• Overview Of The Semiconductor Capital Equipment Industry
• SEMICONDUCTORS & THE WORLD TRADE
ORGANIZATION