Manufacturing

Local Leaders Look to Increase Manufacturing as Semiconductor Shortage Continues to Impact Electronics

According to the Semiconductor Industry Association, the U.S. went from making 37% of the world's semiconductors 30 years ago to just 12% today

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Semiconductors are one of the most valuable components made in today’s technology-driven world, so much so the U.S. Commerce Department said they’re essential to national security.

Now local leaders are looking at ways to increase production so we're less reliant on foreign suppliers.

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The chips are the size of a fingerprint and help power everything from computers to smart devices and vehicles. They were first made in America, but the US has fallen behind other countries in its production.

“The power of these chips and the prevalence of them has expanded to everything. So, their strategic importance has grown at the same time as the U.S. has declined in manufacturing,” said Massachusetts Housing and Economic Development Secretary Yvonne Hao.

According to the Semiconductor Industry Association, the U.S. went from making 37% of the world's semiconductors 30 years ago to just 12% today.

They point to a lack of government investment, which has led to more expensive manufacturing at home – growing our dependence on chips made in Asia.

Then the COVID-19 pandemic happened and it disrupted the global supply chain, revealing a bleak reality.

“American automobiles could not make enough cars because there weren’t enough chips,” said President Joe Biden during his State of the Union Speech on Tuesday. “Car prices went up, people got laid off, so did everything from refrigerators to cellphones. We can never let that happen again.”

Secretary Hao recently visited Taiwan to learn what they are doing differently.

“They just were cheaper, faster, better, and more advanced and that became a flywheel for them. So it’s helped a lot of economies in Asia grow really rapidly but to our detriment because we did not have the same type of intentional government support and we did not have the same type of coordination,” said Hao.

Massachusetts Gov. Maura Healey paid a visit to Analog Devices on January 24, one of the top semiconductor manufacturers in the country, based in Wilmington.

Her administration plans to draw millions from the CHIPS and Science Act passed by Congress last summer and introduce their own state legislation to direct millions more in investments in the Bay State.

“Seeing the research, seeing the innovation that really powers the world and an example of the important kind of companies that we need to get behind and support in our state,” said Healey.

Analog Devices said in a statement it employs about 2,600 people and has facilities in Wilmington, Boston, Norwood and Chelmsford. The company noted it plans on soon expanding its production capacity at its plant in Chelmsford.

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