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20 April 2021

Supply Chain Risk in Leading-Edge Integrated Circuits

Laura A. Odell, Project Leader Cameron D. DiLorenzo Chandler A. Dawson Matthew D. Kowalyk

The long-term strategic impact from future supply chain disruptions, including the potential inability of the U.S. to produce leading-edge1 integrated circuits (ICs) domestically, is a critical risk. This, coupled with the fact that demand for production is outpacing current manufacturing capacity, will have long-term consequences for the Department of Defense (DoD), Department of Energy, Department of Homeland Security, and the National Intelligence communities when ensuring national security objectives are achievable. Integrated circuits (ICs) are a fundamental, foundational element of electronics in components and systems. For the U.S. Army specifically, ICs are critical in weapon systems, core business systems, key communications systems, and artificial intelligence (AI) computational systems. Once a global leader, the United States finds itself in a position of decreasing control and influence in the leading-edge IC markets, a critical segment for enabling U.S. dominance. The lack of technical advancement from trusted foundry participants, strategic and production defects by U.S. companies, prohibitive capital expenditure required to join the market, and foreign state-subsidized competitors have all contributed to limiting trusted supply options for the U.S. Army and other U.S. government entities. This quick look report details the impacts facing the Army strategically in this competitive market.

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