An initiative of Strategic Solutions

Transcription

1 An initiative of Strategic Solutions

2 Secure Solution for U.S. Manufacture Of Advanced Application-Specific Semiconductor Devices White Paper Addressing the growing national security threats posed by the semiconductor industry s loss of leadership in technology development and manufacturing Authored by Jon Scadden President, Strategic Solutions Tel: jnscadden@gmail.com with Jan Smith President, Multilogue Tel: jsmith@multilogue.com The Department of Defense, NSA, DARPA, Air Force, Navy, and Department of Energy can no longer rely on a secure supply of advanced semiconductor devices for deployment in mission-critical intelligence, defense, power grid, or telecommunications systems. The economic and technical realities of producing advanced semiconductors have forced much U.S. technology leadership offshore and made it cost-prohibitive to provide the small-lot custom manufacturing required by the U.S. government. The result is inadequate access and breach of the supply chain with counterfeit and compromised chips. This paper proposes a solution to completely eliminate this security threat the creation of a secure fabrication facility on U.S. soil dedicated to producing low volume, advanced (200mm and 300mm) chips for research, commercial development and DoD use. 11

3 Problem Statement Over the past 20 years, the U.S. microelectronics industry has ceded much of its technology leadership to Asia. Responding to economic realities, American semiconductor manufacturers have transferred increasing control over research and development, intellectual property, and manufacturing to government-subsidized companies in Taiwan and China. This trend has placed critical power, defense, intelligence, and telecommunications systems at risk. Counterfeit and compromised microelectronics plagues the U.S. government s supply chain and threatens the reliability of our defense networks. The catastrophic failure risk inherently found in counterfeit semiconductors places our citizens and military personnel in unreasonable peril, said Brian Toohey, president of the Semiconductor Industry Association, in his testimony for a recent congressional inquiry into counterfeit electronic parts in the DOD supply chain. Toohey also estimated that counterfeiting costs U.S.-based semiconductor companies over $7.5 billion per year and has resulted in the loss of 11,000 jobs. Losing much of our domestic semiconductor-manufacturing base leaves private industry, university research centers, and the U.S. federal government with few choices for procuring advanced semiconductors. These chips are critical to continued research and development of core high-tech infrastructure. This puts in jeopardy the future viability of: More efficient power grid management systems High speed computer networks Department of Defense weapon systems Life-saving medical devices Automotive safety systems Aviation instrumentation Telecommunications controls The catastrophic failure risk inherently found in counterfeit semiconductors places our citizens and military personnel in unreasonable peril. Brian Toohey President Semiconductor Industry Association Testimony to Senate Armed Services Committee, Nov 2011 The microelectronics industry s foreign migration also reaches beyond government security and into every sector of our economy. It has dramatically reduced secure, reliable access to small-lot, customized microelectronic components for both government and industry. It has undermined our ability to protect valuable intellectual property and to support our own research and development efforts. And it has robbed the U.S. economy of much-needed jobs. These threats will only worsen unless critical microelectronics technology and manufacturing is brought back into a controlled U.S. based facility. 2

4 The Strategic Challenge At the heart of the problem is the economic reality that most advanced semiconductor technologies can only be produced with highly specialized and advanced tools designed for high-volume manufacturing. The cost of those tool sets has made it very difficult for semiconductor suppliers to compete without outsourcing to mega fabrication facilities and foundries offshore. 2 Those tools, while still available at key U.S. companies notably IBM are increasingly found only in high-volume advanced semiconductor mega-fabs either located overseas or owned by foreign governments. Even the most advanced fab, GlobalFoundries in upstate New York, is 86% owned by the Abu Dhabi government s Advanced Technology Investment Company (ATIC). 3 The exodus began 20 years ago and accelerated during the recent recession, when Chinese companies acquired tools from U.S. fabs for a fraction of their original price. The fire sale effectively transferred our core technology capability overseas, where foreign governments heavily subsidize semiconductor suppliers. 5 These governments recognize that microelectronics manufacturing forms the cornerstone for future technology leadership. At the heart of the problem is the economic reality that most advanced semiconductor technologies can only be produced with highly specialized and advanced tools designed for high-volume manufacturing. The cost of those tool sets has made it very difficult for semiconductor suppliers to compete without outsourcing to mega foundries offshore. 4 Mega-Fab Economics. It is unlikely that the U.S. semiconductor industry can reverse the loss of its manufacturing base. The industry is driven by the intertwined forces of technology and economics as embodied in Moore s Law, the phenomenon of doubling the processing power possible at a given cost every 18 months to two years. Nanoscale technology is bringing that phenomenon to new levels of performance using nanoscale chips that require fabrication plants ( fabs ) costing $5 billion or more. These new mega-fabs cater to high-volume consumer markets, which can sustain the high-volume manufacturing needed for profitable operations. Low-volume customers like the U.S. military, government, and research centers simply can t be served profitably. The secure advanced chips required by DOD, NSA, DARPA, Air Force, Navy, Army, and DOE typically number only in the hundreds, not the hundreds of thousands or millions. This makes the cost per chip extraordinarily high and severely limits the government s procurement options. The new offshore factories are set up to run tens of thousands of wafer starts per month. The economies of scale simply don t work for small-lot production. The cost of producing 200mm semiconductors becomes prohibitively expensive below the 90nm node. The cost of state-of-the-art 300mm semiconductors is exponentially higher than 200mm products. 1 Counterfeit components cost more than US dollars, SIA testifies, EDN Electronics Design, Dec 1, Intel: $100 Billion Required for IC Manufacturing, Semiconductor Manufacturing & Design, Jan. 17, Dec. 28, Intel, Ibid. 5 Challenges to Foreign Investment in High-Tech Semiconductor Production in China, United States International Trade Commission, Falan Yinug, Web Version, May

5 As a result, there are no current 300mm facilities available in the U.S. today that could be converted to small-lot production. A facility of this nature would need to be built from the ground up. Even high-volume U.S. manufacturers have begun to disappear and will continue to do so as we move to next-generation 450mm wafer semiconductors. Overcoming this cost barrier requires research and innovation in tools and processes. New solutions like mask-less lithography, for example, can bring down cost and create more flexibility. With proper planning and funding, a secure, flexible, state-of-the-art, low-volume foundry can be brought to reality. Low-Volume Alternatives. Options for small-volume procurement of custom semiconductors are quite limited and each presents its own challenges. One option is to partner with foundries to secure small-lot chip fabrication. Companies such as Xilinx and Qualcomm have done so successfully. But here too, small-lot production prices may simply be out of reach, and government buyers must compete with large-lot customers for priority. Security in the foundries is also an issue, as industry consolidation has led to foreign domination of this manufacturing segment as well. That leaves the Trusted Foundry program offered by the federal government, DoD, and NSA. This program has been proactive in offsetting the threat by certifying multiple microelectronics suppliers as Trusted Suppliers. 6 However, with the exception of IBM, Trusted Foundry suppliers primarily produce only older, legacy semiconductors and parts for older DoD weapon systems and radiation-hardened devices. Most DoD-specific suppliers cannot economically justify investing in the facility or equipment upgrades required for advanced semiconductor manufacture for low-volume government contracts. The commercial companies that have been accredited by the program are focused on providing chips for commercial markets. This business model of necessity gives first priority to high-volume customers. Where other Trusted Foundry suppliers focus on providing the government with legacy semiconductors and parts, IBM is its primary advanced (300 mm) chip supplier. This single-source reliance is extremely risky, as IBM faces the same profit motive to favor high-volume markets. Will IBM outsource production of the most advanced 300 mm chips to Global Foundries? Single-sourcing with IBM also places government procurement in jeopardy should a catastrophic event disrupt the supply of trusted components needed for cutting-edge weaponry, navigation, communications, or intelligence devices. Beyond IBM, no other leading-edge semiconductor supplier has indicated a willingness to accommodate the government s low-volume needs. Government acquisition requirements have proven to be disruptive of normal commercial business operations and are viewed as a risk to profit potential. Supply Chain Contamination. Device design, board-level production, mask manufacturing, semiconductor chip production, test and packaging efforts are all now developed and supplied largely from offshore suppliers. With this new reality come dramatic increases in counterfeit or compromised products in the U.S. supply chain

6 Back in 2010, the Department of Commerce reported that the supply chain had already experienced a significant compromise through counterfeit product. 7 In November 2011, Sen. Carl Levin (D-Mich.), chair of the Senate Armed Services Committee, said that these counterfeit goods are a clear and present danger and a threat to our troops. There is a flood of counterfeits and it is putting our military men and women at risk and costing us a fortune, he noted. 8 Even the legacy product supply is suspect in that those products have long been out of production and are only available through reclaim (stripping old boards) or redesign. Reclaimed parts are generally acquired from offshore supply and are therefore highly subject to counterfeiting and tampering, which can take place anywhere within the production cycle (design through finished product). In our study of the problem, we received input from executives and production staff at every step of the semiconductor design and manufacturing process. This anecdotal evidence clearly illustrates that counterfeit activities and actual tampering are widespread across all levels of manufacturing. If any one of the various suppliers shown in Figure A fails to exercise stringent controls through each step of their process, counterfeit or compromised product can result. Counterfeit activities and actual tampering are widespread across all levels of manufacturing. We have been advised that the only way to eliminate the problem under the current circumstances is to 100% test each device. We seriously doubt that this would solve the problem and the cost would be higher than reproducing the product in a U.S. foundry. Moreover, malicious designs can be put into product designs and not detected by device functionality testing this is a particular concern with FPGA devices. Figure A 7 Defense Industrial Base Assessment: Counterfeit Electronics, U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, 5 Jan Counterfeit electronics in supply chain put contractors on the hook, Federal Computer Week, Nov. 8, 2011.

7 The Solution: American MiniFoundry (AmF) Strategic Solutions American MiniFoundry is seeking government support to eliminate the dual threats of limited semiconductor access and contaminated supply. We propose the creation of Leading edge, secure fabrication facilities on U.S. soil dedicated to producing small-lot quantities of advanced chips (200mm and 300mm) for use by: Research centers in commerce and universities Military bodies Intelligence community Energy agencies and suppliers For-profit chip, equipment, and materials suppliers With federal support, Strategic Solutions proposes building a secure advanced semiconductor fabrication facility on U.S. soil using trusted supplier principles. Our solution will provide a secure semiconductor supply chain for those sectors needing advanced semiconductors in low volumes. It will provide a secure supply of product free of contamination or tampering. In a time of rising economic instability and trade tensions in world markets, we believe it has never been more important to secure an advanced semiconductor development and supply chain for mission-critical applications. American MiniFoundry Concept. With federal support, Strategic Solutions proposes building secure advanced semiconductor fabrication facilities on U.S. soil using trusted supplier principles. The MiniFoundry would ensure the availability of low-volume advanced semiconductor tools, development, and product by supporting the needs of government, research, and supporting for-profit industry. No device manufacturing would be done offshore or for offshore companies. The foundry will not provide products or services for any customer requiring large volume production. Our total focus is meeting the needs for U.S. microelectronics development and small-lot production. The secure facility would provide foundry support for US: Semiconductor chip suppliers Equipment suppliers Materials suppliers Trusted Suppliers Government agencies This focus will allow these organizations to conduct advanced development for their products with complete assurance that their work would not be compromised. The MiniFoundry will have the ability to produce state-of-the-art 300mm devices as well as 200mm devices. The 300mm site would be capable of 22nm or better and the 200mm line would have the capability of sub 90nm or better and also support legacy products. We are seeking an existing 200mm facility that is upgradeable to 65nm. We would consider partnering with someone providing it works with this model. Likewise, we are seeking an existing 300mm facility using the same model. If we are not successful in obtaining one or both, then we propose building new greenfield manufacturing facilities. 6

8 Additionally, we are seeking advanced technology for the MiniFoundry to reduce, and in some cases eliminate, the high cost of lithography and masking. We are also looking at advanced engineering tools that cut development time and cost in half. Examples include new tools in development today that promise to eliminate the need for masks, which would dramatically cut lithography costs and time-to-market. We are also looking at incorporating existing technology that can reduce process development time by up to 50%. By focusing on a lower volume, we will be able to manufacture a higher number of discrete parts and incorporate multiple process technologies. At the same time, we believe we can improve the cost of service and process control of these advanced tools. American MiniFoundry Benefits. The MiniFoundry can solve long-standing problems that commercial entities subject to free-market pressures cannot. It will be free of the shareholder profit pressures and performance requirements that have forced commercial fabrication facilities to shed domestic operations in favor of offshore volume production. We believe that this is the only viable path to securing a reliable, uncontaminated supply of advanced technology tools and parts for U.S. government and its suppliers. The incalculable value of the MiniFoundry will be the development of a method to design and manufacture low-volume microelectronics cost-effectively and securely on our own shores. This is the goal U.S. government strategists have been reaching for since the Defense Science Board Task Force issued its recommendations on High Performance Microchip Supply in 2005: Developing cost-effective technology for the design and fabrication of low-production-volume, leading-edge technology ASICs (Application-Specific Integrated Circuits) will require the combined efforts of DOD, the semiconductor industry, and semiconductor fabrication equipment suppliers. The industry s emphasis on manufacturing economies of scale has led to a manufacturing approach that is not sufficiently flexible for DOD s special circuit needs. Commercial industry is now beginning to realize a need for economical, limited IC production as well. The American MiniFoundry will be the first bonafide secure facility dedicated to critical defense and military applications for the development and low volume manufacturing of advanced integrated devices on 200mm and 300mm wafers. Developing an alternative, more flexible approach to integrated circuit manufacturing demands a thorough reexamination of business models, technology, and manufacturing equipment design. The Defense Advanced Research Projects Agency (DARPA) attempted such a reexamination in the mid-1990s through its Microelectronics Manufacturing Science and Technology (MMST) program. That program had different goals than are required today. DDR&E should now take another look at ASIC production and formulate a program to address barriers to low- to medium-volume custom IC production. 9 9 Recommendation 5, Report of the Defense Science Board Task Force on High Performance Microchip Supply, February 2005, 7

9 The MiniFoundry will employ trusted foundry principles and serve all trusted suppliers. It will be available to support universities conducting research for government-funded programs and grants. Part of the operating staff will include graduate students (U.S. citizens only) who are engaged in such research. As such, it will be an important focus for restoring U.S. R&D capability in advanced semiconductors. The other major value is the elimination of compromised and counterfeit products from the supply used in mission-critical infrastructure, military operations, and national security endeavors. We will work closely with government experts to establish and maintain maximum security for the operation. We believe that the initial investment cost requested of the federal government would be rapidly returned through reduction or elimination of compromised and counterfeit supply. 10 American MiniFoundry Cost. We are seeking Federal and State support to fund this facility, based on the assumption that we can acquire existing facilities. 11 Facility layout and tool specification activities are under consideration and will share budget numbers as they are completed. We are seeking seed funding to cover first-year costs for: 1. Extensive effort to gain government support 2. Layout of the facility 3. Equipment and materials requirements 4. Create a capitalization plan 5. Develop a revenue plan 6. Travel and expenses 7. Hire industry experts for various aspects of the layout and build 8. Develop a customer base with commitment before build When completed, the MiniFoundry will generate revenue from the services provided to the U.S. government, U.S. suppliers, U.S. university research centers, joint program development, and state projects. 10 Counterfeit electronics in supply chain put contractors on the hook, Federal Computer Week, Nov. 08, If a Greenfield effort were required, the request for government investment would increase to $1.5 billon. 8

10 Our Team Strategic Solutions and members of the MiniFoundry Advisory Board are actively meeting with state and local governments to procure an appropriate location and incentive for this facility. In addition, we are seeking the support of Congress to help appropriate the necessary funds to launch this project. We are also actively interfacing with the U.S. supplier base, where we are finding overwhelming support for this concept. Strategic Solutions. Strategic Solutions is an engineering firm that provides development solutions for new semiconductor technology in the United States. In addition, we provide customers process solutions with our foundry alliances in the United States. The firm has been in continuous operation since 1995 and is based in Sacramento, CA. Jon Scadden. Jon is president of Strategic Solutions and creator of the American MiniFoundry initiative. He combines extensive semiconductor manufacturing/packaging expertise with a comprehensive background in business development and outsourcing success with masking, lithography, operations and packaging. Educated at San Jose State University, Fairchild Semiconductor and National Semiconductor, Jon went on to a very successful career in executive sales & marketing of advanced capital equipment with the GCA Corporation, Materials Research Corporation and Tegal (a spin-off of Motorola Corp). In 1995 Jon launched Strategic Solutions to provide critical advice and consultation to both chipmakers and equipment manufacturers and was the keystone of the first outsourced Ion Implant service in the industry through his association with Innovion. Leveraging his experience with early-on production of government-centric semiconductors, Jon launched the American Mini Foundry in late He resides in the rolling hills of the Sierra Nevada range outside Sacramento, CA and is a former member of the SEMI Sales and Marketing Executive Council. Board of Advisors Jon Scadden, President, Strategic Solutions Dr. Robert Doering, Senior Fellow, Texas Instruments Paul Edmonds, (Former) Vice President Operations, National Semiconductor Maine Gerry Etzold, (Former) NSA, Director of Trusted Access Program Office Dr. David Lam, Chairman, Multibeam Corporation Todd Mosher, President, Zone 5 Marketing Dave Ossman, (Former) Managing Director NSC, Maryland Site Dr. Brent Segal, Chief Scientist, Lockheed Martin NanoSystems Loren Sutherland, Senior Technology Strategist, Zone 5 Marketing John Waite, (Former) Vice President, Central Engineering, GLOBALFOUNDRIES 9

11 Summary The American MiniFoundry initiative is dedicated to establishing the first bonafide secure facility for the development and low-volume manufacturing of advanced integrated devices on 200mm and 300mm wafers solely dedicated to critical defense and military applications. This facility will support the existing Trusted Fab Program and provide synergy with U.S. industry equipment and materials suppliers as well as leading academic Centers of Excellence. This is a Made in America campaign designed to restore integrity and security to the advanced semiconductor supply chain and to reclaim U.S. research and development capability from foreign countries. We are seeking support from federal and state legislators, the U.S. military, NSA, DARPA, DOE, and their research centers and suppliers to raise the seed money to launch this effort in