Purdue Polytechnic faculty are collaborating to explore American reforms to the global semiconductor supply chain. It's to this end that Tho Le and James Tanoos, in industrial engineering technology and supply chain/sales engineering technology respectively, are adding curriculum and leading research with students in Purdue Polytechnic, the College of Engineering and the John Martinson Honors College.
The overarching goal for Le, Tanoos and their students is to prepare for the U.S.’ re-shoring efforts in semiconductor production. Semiconductors, or computer chips, are a necessary component in almost all modern electronics. This spurred the U.S. Congress to pass the CHIPS Act, signed by President Joe Biden on August 9, 2022, which funds holistic development of the semiconductor industry to the tune of $280 billion.
Anticipating the act’s passage, Purdue University has just partnered with South Korea-based semiconductor company SK Hynix to build a nearly $4 billion facility in the university’s Research Park.
Since the SK Hynix facility will be the first chip manufacturer in the Midwest, Purdue will be involved in building out a new industry in the region—from creating transport lines for raw materials to training the workforce. As Purdue prepares to fulfill the mission of the CHIPS Act, Le believes that Purdue Polytechnic’s mandate is “to educate the future talent needed in chip-making facilities.”
Problems with the status quo
“The motivation for the research came from all the ways the pandemic disrupted the supply chains. The semiconductor supply became especially severe,” Le said.
The dearth of chips has had ripple effects through many industries. “For example, the shortage of semiconductors caused automotive manufacturing times to increase about threefold, to an average of 10-12 months while also forcing production cuts. Automakers around the world lost about $210 billion in revenue in 2021.”
Tanoos emphasized how supply chain issues were a slow-rolling crisis, which began in 2020 but hit a nadir in 2022. “Indiana producers usually manage economic slowdowns extraordinarily well,” he stated. “Toyota’s manufacturing base in Princeton, Indiana had run unabated since they set up shop in the mid-90s. Along with the other major automakers in the state, Honda and Subaru, they’ve really propelled the whole state’s economy.”
Even though Toyota in Princeton had never previously laid off a single employee, their record of success was trammeled for the first time in their history by “the bottleneck-of-all-bottlenecks,” the semiconductor shortage of April 2022.
The lack of semiconductors, “a component the size of a fingernail,” was enough to grind manufacturing to a near-total halt, “even for a massive multinational auto manufacturer like Toyota,” Tanoos stated.
The CHIPS Act explicitly accounts for how this bottleneck occurred. It came from overreliance on a single source—that is, Taiwanese chip producers.
In addition COVID-19 shut down Chinese ports, not to mention China’s semiconductor manufacturers and the silicon mining industry. Le stated that the U.S. provides “less than five percent” of the raw materials, like silicon and other critical minerals, needed to produce chips. The far-and-away global leader in this area is mainland China, which provides just under 70% of the silicon and over 50% of the critical minerals used by industrial manufacturers.
The CHIPS Act boosts American semiconductor research, development and production and seeks to minimize reliance on overseas suppliers through a concerted national effort. Le, Tanoos and student collaborators believe that Purdue can play a major role in achieving that goal.
Collaborative efforts across Purdue
In an effort to help Purdue reach maximal influence in developing the U.S.’ chip-making capacity, both Le and Tanoos have expanded their efforts with students.
As a reaction to the announcement, Tanoos introduced new semiconductor supply chain curriculum into his coursework with a collaborator, Dutch industrialist and author of one of Purdue's supply chain course textbooks, Bram van Oirschot. van Oirschot (a commercial director for an engineering contractor based in Eindhoven, and a sales consultant for many other businesses) virtually introduced the case and assessed final presentations. Throughout the semester, students investigated methods designed to strengthen the semiconductor supply chain.
“A great deal of what Tho [Le] and I are working on prepares students for this change,” Tanoos said. “You can’t just flip a switch and get knowledgeable employees. They have to be trained on the nuances of the entire semiconductor industry, and how to prevent idling assembly lines like in April 2022. Bram has provided many of the critical insights on that front.”
For his part, Le’s research seeks to “make the U.S. semiconductor supply more resilient and dependable.” This research requires robust collaboration, which has led Le to incorporate students from the College of Engineering and the Honors College into the mix.
The first research project headed by a student author shows promise. Nemisa Samanthapudi, a junior in industrial engineering, created Purdue Polytechnic’s third best research poster in the Office of Undergraduate Research’s spring 2023 competition. Le introduced Samanthapudi to her research area, leading to the final piece entitled “Semiconductor Supply Chain: the Current Status, Challenges, and Suggestions for Promoting Semiconductor Manufacturing in the U.S.”
Reforming, re-shoring the semiconductor industry
While researching, Samanthapudi discovered that the U.S. has about 40% of the total workforce in chip design, and that workforce produces approximately 50% of the global revenue for new innovations. But the more physical, resource-intensive end of manufacturing has been mostly outsourced, with the U.S. only contributing about 12% of all front-end chip manufacturing.
Samanthapudi found that a small number of production components (e.g. product assembly, testing and packaging) are controlled by countries like China, South Korea and Taiwan. But the bulk of production and distribution is still run by China, which layers a set of precarious political concerns on top of the economic issues.
“The CHIPS Act designates a final dollar amount for funding, but the good news is that some of the potential solutions I identified don’t require big spending on the part of governments,” Samanthapudi said. In her research, Samanthapudi found that widening the semiconductor industry’s net also requires solutions that are “policy-driven rather than money-driven.”
Such solutions involve the U.S. working alongside willing partners (such as Germany, India, the UK and Japan) to reform immigrant/nonimmigrant visa processes, or to create international curriculum standards for employee training. Such solutions will be necessary to develop the workforce, but will not require a large allocation of CHIPS Act funding.
The CHIPS Act outlines high-level strategic goals, but has largely left day-to-day administration in the hands of industry partners on the ground. “That’s why institutions like Purdue have to be clever about what they offer, and how they contribute,” Le stated. “No matter what else happens, the manufacturing are going to be breaking ground in the Midwest. That’s why of our reseatch conclusions is about human resources development. Once the buildings are standing, in West Lafayette or elsewhere in the U.S., it’s critical that we actually have the people to staff the production lines.”
Tanoos said that with more research and the industrial innovations spurred on by the CHIPS Act, Purdue is “poised to become a key cog in all of the critical manufacturing areas.” Le and Samanthapudi continually emphasized that Purdue could become one of the first organizations to make meaningful progress in "optimizing" the supply chain in the western hemisphere.
If the chip industry springs up in the Midwest, Purdue may not only "insulate the economy from further shocks like the pandemic" and "create a more politically stable situation," as Samanthapudi said, but it could become a critical incubator for innovation. By training the workforce around Purdue on the latest technology, this newfound Midwestern semiconductor industry could go beyond economic stabilization and create new processes, manufacturing practices and even new chip designs.
“In our roles, we will continue updating curricula for Industrial Engineering Technology and the Supply Chain and Sales programs to prepare students with knowledge and skills to lead them to success in the semiconductor industry” Le said.
Additional information
- Purdue convenes CHIPS summit in D.C. with Sec. Raimondo and Sen. Young, announces sustainability index and facility investment (Purdue News)
- SK hynix announces semiconductor advanced packaging investment in Purdue Research Park (Purdue News)
- Silicon production—United States Geological Survey (January 2020)
- Purdue-led project awarded $5 million for Greater Lafayette to grow semiconductor industry workforce (Purdue News)