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Category |
Opportunity |
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DoD Communities of Interest |
Advanced Electronics |
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Subject |
AFWERX Microelectronics Prime Onshore Microelectronics Design and Manufacturing Confidential Market Research |
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Due Date |
8 April 2021 |
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Government Organization |
AFWERX |
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Description Onshore Microelectronics Design and Manufacturing Background: AFWERX seeks diverse industry partnerships and engagement to identify key technology sectors that could support the Onshore Design and Manufacturing of microelectronics in the US. This focus also includes enabling/supportive efforts in test and quantifiable assurance. If “primed” by government engagement, this research topic could advance US national security and economic interests. Microelectronics is a major cross-cutting technology enabler in a vast array of commercial and military platforms. The commercial industry has challenges designing and producing components for lower volume applications at a price where the end product is competitive. For military systems, even the most advanced platforms have 16-year-old microelectronics technologies. That military technology gap has grown steadily since 1980 while our adversaries have access to more state-of-the-art components for their military systems. Furthermore, microelectronics design and production are a globalized industry, with the Department of Defense (DoD) making up less than 1% of the market. Significant supply chain risk exists because key supply chain elements (fabrication, packaging, test, etc.) are located overseas. As seen from recent supply chain challenges due to COVID and a current lack of chips for automotive systems, these challenges span both commercial and national defense applications. Only three manufacturers exist in the world that can produce state-of-the-art components. China is also investing heavily to become a critical semiconductor player, and their sponsored company, SMIC, is quickly gaining ground. Reaching fabrication capability parity will take some time, but the immediate competitive threat is their development of design capabilities fabricated by a state-of-the-art Taiwanese foundry, TSMC. TSMC has fabrication facilities, also known as "fabs," located in Taiwan and mainland China. Broadening the production base will ensure guaranteed access for DoD needs. It will also democratize semiconductor products into more applications, lower cost, and allow smaller companies to thrive. The DoD must take action to ensure advanced design capabilities remain competitive with our key adversaries like China. A large entry barrier exists in the chip design area due to enormous upfront infrastructure costs (design software, IP, fabrication, and test). It makes it difficult for innovative small firms to compete and makes investments unattractive to typical venture capital firms. These barriers impact both DoD advanced chip design teams and new entrants into state-of-the-art chip design. Lastly, innovative designs and guaranteed access can more easily allow for adaptability across long weapon platform development and production timelines and future mission upgrades after fielding. With these designs, the DoD can decrease development and production uncertainty and bend the sustainment cost curve allowing capabilities to get out to the market research faster. Details of Onshore Microelectronics Design and Manufacturing: The DoD and US economy, in general, would benefit from better onshore capabilities to design and produce electronic components with unique DoD and US commercial requirements. These capabilities include enabling/supportive technologies in test and quantifiable assurance, enabling new DoD needs, fostering innovative startups, developing breakthrough technologies, improving end-to-end security, and reducing cost and time in design and production. Such a capability would help build custom designs that enable adaptability to future missions and upgrades. It would also allow for low volume/unique component design and production and broaden the design, production, and test industrial base. These capabilities equate to a win-win for both DoD needs and US competitiveness in microelectronic design and production. This effort will also improve and document end-to-end quantifiable assurance frameworks and security risks to recommend and develop necessary improvements. The market research will also document challenges and provide solutions to mitigate challenges due to a sufficiently long weapons platform development and production timeline (e.g., 10-year system development, 5-year production) and a longer sustainment timeline. It will also document and provide solutions to ensure continued long-term access to necessary technologies or comparative or better capabilities, including continued access to state-of-the-art capabilities. Lastly, this initiative will coordinate and collaborate, where appropriate, with other ongoing research projects. For example, DARPA’s Electronics Resurgence Initiative (ERI) 2.0, Rapid Assured Microelectronics Prototypes (RAMP), State of the Art Heterogeneous Integration Prototype (SHIP), Trusted and Assured Microelectronics (T&AM) efforts, or other relevant programs. Why Onshore Microelectronics Design and Manufacturing? Microelectronics are the bedrock for almost all commercial and national defense systems and drive capability gaps against industry competitors and the US’ biggest adversaries. Commercial applications and military systems overmatch increasingly rely on faster computing, sensor fusion, and quicker decision making. Microelectronics allows military commanders and some commercial applications to compress the Observe, Orient, Decide, Act (OODA) Loop by taking in massive amounts of structured and unstructured data sets, sensor data, and communications. They quickly post-process that information to provide decision data for business and DoD leaders and data for autonomous systems to make a decision faster than a commercial competitor or US enemy. The recently passed 2021 National Defense Authorization Act (NDAA) calls for significantly enhanced domestic capabilities in microelectronics for both DoD and the broader industrial base. According to plans, the initiative will receive tens of billions of dollars of support. Government Stakeholders Involved: Objective of the Market Research: We seek feedback from industry, investors, academia, and government to inform how the Microelectronics initiative will be fashioned. The feedback received through this survey will be used to determine whether this prime will be initiated. It will also determine the scope of the effort to quickly advance technology maturity, investment readiness, and market adoption of commercial capabilities in microelectronics and derived business opportunities. Respondents can choose to provide feedback to all or some of the questions. What’s in It for Industry? As microelectronics continues to permeate almost every aspect of our daily lives, it is important to strengthen the industrial base, irrespective of company size. Furthermore, developing lower cost and faster-to-market products with onshore design and manufacturing capabilities along with advanced test capabilities would enable even greater microelectronics usage throughout a wide range of commercial products and decreasing supply chain concerns. Last, every company is concerned with counterfeit and tampered parts, especially for critical infrastructures such as the financial industry and utilities. These applications are especially interested in leveraging DoD-developed approaches to a quantifiable assurance framework. Next Steps: The market research phase of this initiative is open for six weeks. There will then be an evaluation of the submissions received before deliberations about whether this could become a future prime topic. Microelectronics Prime Background: Since then, between 2014 and 2019, the global market for microelectronics grew from $336 billion to $412 billion, while the market share for defense systems plummeted to less than 1% of the market. Microelectronics is a major cross-cutting technology enabler in most military platforms. It is the bedrock of most military and commercial technology capabilities driving overmatch against near-peer advanced adversaries. As the market has grown, cost concerns have driven manufacturers offshore to foreign fabs. The US dominated the microelectronics industry in the 1990s. However, nearly 75 percent of microelectronics designed by domestic manufacturers were produced offshore by 2020, and 95 percent were packaged and tested offshore. Therefore, the pedigree of microelectronics cannot be guaranteed in US military platforms, and the cost for limited production design is cost-prohibitive. The recent COVID-19 pandemic has shown the risks of relying on unsecure supply chains. The Department of Defense (DoD), or even the US industry, does not drive this market, which results in access challenges, particularly with state-of-the-art technologies. In addition to guaranteed access, the DoD also needs specialized military technology, which is difficult to gain commercial support in design and production. These unique capabilities are increasingly achieved by advanced packaging techniques (i.e., heterogeneous integration, 3D, 2.5D). Microelectronics design, production, and test capability is an essential need for the DoD. Given the need for lightweight, fast, and reliable microelectronics in military platforms, securing and developing a domestic infrastructure is a necessary goal if the DoD wants domestic defense platforms to achieve dominance over peer and near-peer advisories. The high entry barrier for advanced microelectronics due to high infrastructure costs, including design, fabrication, and testing, is a considerable challenge. It is also of particular interest for DoD design teams and innovative young startups. These high upfront infrastructure costs make microelectronics chip design an unattractive venture capital investment limiting US and DoD innovation in this area. Microelectronics Prime video files and articles: |
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