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Since President Biden signed the CHIPS and Science Act, significant attention has been focused on this landmark legislation to rebuild America’s semiconductor industry. We have seen several announcements of historic private sector investments focused on strengthening domestic semiconductor manufacturing, supply chains and R&D. Yet much of the national conversation focuses on logic chips.
There’s another category of semiconductors that’s in danger of being forgotten: memory chips. Since the invention of the first commercially viable “dynamic random-access memory” (DRAM) in the early 1970s, memory has been one of the key enablers of modern computing systems, helping to drive the overall semiconductor industry. . Nearly all modern electronics, including cell phones, cars, medical gear, military systems, and cloud data centers, rely on large amounts of memory to securely store the information we rely on. And given the insatiable demands of today’s aptly named “data economy,” this dependency grows stronger every year: memory is mission-critical for future technologies, like AI and supercomputing.
Memory technologies are central to enabling and maintaining our nation’s innovation competitive edge, yet less than 2% of the world’s memory supply is manufactured within the US, and all of that comes from a single company, Micron Technology. Currently, every leading memory fab is located in Asia, with more being built every year as nations realize the importance of memory. This has led to a high concentration of manufacturing capacity and supply chain risks that are far worse than those found in the logic industry.
Semiconductor memory is the foundation of our nation’s technological leadership and yet it is more at risk than ever.
Domestic production of secure memory technology is critical to U.S. technology leadership, jobs, and economic growth, as well as our national and economic security, and thus requires immediate attention.
As someone who has built a career in memory and serves as a consultant to companies and government, I can vouch that memory is an extremely competitive business. Last year, memory represented about 28% of the global $556 billion semiconductor market, the same percentage as logic. However, while logic companies’ large advertising and branding budgets often have a bearing on them, the workhorse memory industry drives a far greater share of the industry’s capital expenditures.
New memory fabs must be built much larger than most logic fabs to be competitive. Keeping up with the most advanced technology entails massive R&D bills as well as constant capital reinvestment. And these investments must be made every year, even though this profitability is much lower than average and arguably much more volatile than that found in industry.
Unfortunately, American companies are not competing on a level playing field. The memory industry originated due to American innovation, but today it is concentrated in Asia where governments have responded to the economics of the industry by subsidizing memory production and R&D.
Securing the supply chain for these essential system materials should be reason enough for the US to invest in memory. The integrity of any computing system we rely on is directly dependent on the devices that store our vital information. Geopolitical disruption to the memory supply chain would be devastating to every sector of the economy, but investing in memory would have tremendous additional benefits for the US.
First, memory production drives the bulk of demand for semiconductor devices. While the US still leads this industry, its profits have shifted to offshore countries intent on monopolizing memory. U.S. memory investment will help ensure that this equipment first enables our own production, while also providing huge domestic demand for everything from raw materials to silicon wafers to the chemicals and gases on which semiconductor production is based. depends on.
Second, the size and scale of memory fabs will allow the US to truly revitalize the domestic skill base in fab manufacturing and operations, providing a stable base of well-paying jobs that cannot rely on logic fab manufacturing alone for sustainability. does not make.
Ultimately, increased investment in new memory fabs will be large enough to economically transform entire communities and regions. And the incentive benefits of key investments are multiplied by the economic activity generated in local communities and supply chains.
We are at a critical juncture, and the Biden Administration must ensure that the memory industry takes advantage of some of the biggest opportunities created by the Chips and Science Act. Semiconductor memory is the foundation of our nation’s technological leadership and yet it is more at risk than ever. As policymakers debate the merits of various semiconductor projects, the economic and national security benefits of a historic investment in leading-edge memory production will certainly be beneficial to the US. We cannot forget about memory.
