Speaker 1: Have you been seeing all these shortages. It feels like
Speaker 1: there's a shortage of everything.
Speaker 2: Yes, there's a shortage on baby formula, there's a shortage
Speaker 2: on tampons. I saw something about olive oil shortage olive oil,
Speaker 2: which is creeping very close to there be.
Speaker 1: A shortage of my patients.
Speaker 2: I am very tired of all of these shortages because
Speaker 2: as soon as something there's not enough of something, that
Speaker 2: means people are going to start panicking.
Speaker 1: We saw that in the.
Speaker 2: Pandemic when there was a shortage of toilet paper and
Speaker 2: hand sanitizer and chlorox wipes. And one thing that has
Speaker 2: come across our radar but isn't really that new, is
Speaker 2: the semiconductor chip shortage. Yes, and I feel like Christopher
Speaker 2: Mims gave us a little bit of a heads up, like, hey,
Speaker 2: some of these things are happening, but it's getting out
Speaker 2: of control.
Speaker 1: Now.
Speaker 3: I want to know why we're still dealing with this
Speaker 3: shortage and what's next? What are we going to do
Speaker 3: about it? What's the plant? I'm Tti and I'm Zakiath
Speaker 3: and from Spotify.
Speaker 4: This is Dope Labs.
Speaker 2: Welcome to Dope Labs, a weekly podcast that mixes hardcore
Speaker 2: science pop culture and a healthy dost of friendship. So,
Speaker 2: like we just said, there's been a lot of shortages,
Speaker 2: one being the chip shortage.
Speaker 1: But the chip shortage is a little bit more complicated,
Speaker 1: changing a lot.
Speaker 4: I guess whether or.
Speaker 1: Not there is a shortage. It depends on what you
Speaker 1: type into Google.
Speaker 2: It seems like in some countries they got a lot
Speaker 2: of chips, but in the US we might not have enough.
Speaker 2: At some points, you know there's not enough chips, and
Speaker 2: then at another point you got too much dip on
Speaker 2: your chip.
Speaker 3: This week, we're talking all about computer chips, or specifically
Speaker 3: semiconductor chips. These tiny pieces of equipment that are in
Speaker 3: every computing device out there. They're vital to how our
Speaker 3: world runs, and right now there's a major shortage. We
Speaker 3: wanted to know more about what's caused a chip shortage,
Speaker 3: how it's affecting our lives, and what people are doing
Speaker 3: about it.
Speaker 1: Let's get into the recitation. So what do we know?
Speaker 3: Chips, chips, chips everywhere. They're in everything.
Speaker 2: Literally, they're in everything. Any device that operates on its
Speaker 2: own without you having a cranket, it has a semiconductor
Speaker 2: chip inside of it. And so when you stop and
Speaker 2: think about that. Almost everything except like a table, and
Speaker 2: some of these tables have chips in them too.
Speaker 3: My desk was going up and down. It probably has
Speaker 3: a chip.
Speaker 4: It does have a chip.
Speaker 2: They're in our refrigerators, they're in our cars, they're in
Speaker 2: military equipment.
Speaker 1: Almost everything you touch has a chip in it.
Speaker 2: We know that there's a shortage and it's having an
Speaker 2: effect on the economy.
Speaker 1: So what do we want to know? Where are we
Speaker 1: in the shortage?
Speaker 2: Because I thought we have reached the heights of the
Speaker 2: shortage in twenty twenty Right then it's twenty twenty one.
Speaker 2: We went over what I thought the high was, and
Speaker 2: so here we are now the shortiest of shortages. Okay,
Speaker 2: I thought shortage meant we got a little bit. Y'all
Speaker 2: still saying shortage? How we stealing out a little bit?
Speaker 2: What's happening?
Speaker 3: And what is anybody doing about it? What are manufacturers
Speaker 3: doing about it? What kind of policy is around hopefully
Speaker 3: relieving some of the pressures here? What's going on?
Speaker 2: I think something that would be important for people to
Speaker 2: understand is the importance of semiconductor chips, So how they work,
Speaker 2: why they're so important, and why we should be worried
Speaker 2: about it.
Speaker 3: Let's jump into the dissection.
Speaker 1: Our guest for today's lab is Al Thompson.
Speaker 5: I'm Al Thompson. I'm the vice president of US and
Speaker 5: Canadian Government Affairs at Intel.
Speaker 3: Intel is one of the major players in the semiconductor
Speaker 3: chip industry, and because these chips are in so many
Speaker 3: things that we rely on, that industry is shaping our lives.
Speaker 1: Ow broke down what a chip is.
Speaker 5: It's a complex device that forms the brains of anything
Speaker 5: that involves computing.
Speaker 3: That includes phones, medical devices, cars, more and more modern
Speaker 3: appliances have chips, and most of those chips are made
Speaker 3: in Taiwan, South Korea and China.
Speaker 5: It's one of the most complex products manufacturing in the world.
Speaker 5: They're small as a fingernail. They're flat, but on the
Speaker 5: surface you generally have three dimensional structures that can include
Speaker 5: up the thirty layers of different circuitry on them.
Speaker 3: So what's a chip made of?
Speaker 2: The basis for every chip is that it's built on
Speaker 2: a piece of silicon, and then on each piece of
Speaker 2: silicon there are these things called transistors, and transistors are
Speaker 2: what the device uses to function. It has switches and
Speaker 2: amplifiers and things like that different chips have different responsibilities,
Speaker 2: so not all chips are created equal. Some are used
Speaker 2: for storing data, so if you think about your those
Speaker 2: chips store data so you can access it whenever you
Speaker 2: want to. Some chips are called microprocessors, so they perform
Speaker 2: most of a computer's calculating functions.
Speaker 1: You know, back in the day, chips weren't what we
Speaker 1: know chips to.
Speaker 2: Be now, where you can have thin laptops, AirPods that
Speaker 2: don't have a cord, and all these different things. Fifty
Speaker 2: years ago they would take up entire rooms, Like when
Speaker 2: you're talking about the first computer, it took up an
Speaker 2: entire room, and even things like oh, you know how
Speaker 2: we say, oh, if.
Speaker 1: There's a bug in my computer. Back then, it was
Speaker 1: literal bugs.
Speaker 2: That's where we get the terminology from the first computer.
Speaker 2: Rug was a moth inside of this side of this
Speaker 2: computer that took up a whole room. Everything is so
Speaker 2: thin and so small because there have been so many
Speaker 2: advances in chip technology.
Speaker 5: The microprocessor was first created well over fifty years ago.
Speaker 5: But you know, now the technology has evolved in terms
Speaker 5: of the manufacturing process where you can stack different components
Speaker 5: on top of each other. Even know the surface of
Speaker 5: the chip itself is still pretty that so.
Speaker 2: There's all of these pathways for electricity to move around
Speaker 2: the chip and perform different functions. And also the most
Speaker 2: sophisticated chips have hundreds of millions or billions of these
Speaker 2: circuitries on them and that are interconnected by fine wires
Speaker 2: and copper.
Speaker 5: So on that small little piece of equipment you have
Speaker 5: the ability to do everything from either store information and
Speaker 5: those are called memory chips, or actually compute and make decisions.
Speaker 5: We call those logic chips.
Speaker 3: So chips have been getting smaller and smaller, but their
Speaker 3: capabilities are increasing. To understand how that's happened, we need
Speaker 3: to understand how the chip is kind of evolved.
Speaker 2: The evolution of the semiconductor chip is defined by a
Speaker 2: prediction that was actually made in nineteen sixty five by
Speaker 2: one of the co founders of Intel, Gordon Moore, and
Speaker 2: the prediction is called Moore's laws. He says that the
Speaker 2: number of transistors on a semiconductor chip will double every
Speaker 2: two years. If you have a semiconductor chip and there's
Speaker 2: ten transistors on it, two years from then, there'll be twenty,
Speaker 2: and two years from then there'll be forty two years
Speaker 2: from then, it'll be eighty and so on and.
Speaker 5: So forth, and that is continued to this point. What
Speaker 5: More's Law has done is has allowed chips to basically
Speaker 5: evolve and be able to go from what used to
Speaker 5: be very large computer mainframes to your iPhone. And it's
Speaker 5: an continual process that allows us to try to get
Speaker 5: more transistors on a chip, that makes a chip more
Speaker 5: energy efficient yet powerful from a computing standpoint, but making
Speaker 5: the size smaller all at the same time.
Speaker 3: I think the common misconception when people here computing is
Speaker 3: to think only about computers. But like you said earlier,
Speaker 3: chips are in everything. Your refrigerator, your car, for example,
Speaker 3: brand new cars now are about four percent chip. That's
Speaker 3: a lot. It's not just older as one chip. If
Speaker 3: you had car problems, you know about the chips, okay,
Speaker 3: and it's only expected to continue to increase.
Speaker 2: There's really no aspect of our lives that's becoming less digital.
Speaker 2: If you think about it, everything is becoming more and
Speaker 2: more digitized. Like as we see advancement in any technology. Now,
Speaker 2: I can't even think of something that doesn't have a chip.
Speaker 4: Truly.
Speaker 3: Your glass is the only thing I seen without a chip,
Speaker 3: but those about to start clipping over Google.
Speaker 2: Glass and everything like that. Mm hmm, I'm ready for that.
Speaker 2: My friend want to be a I want to be
Speaker 2: a robot. Put the chips in me, put it in me.
Speaker 2: That's what I want.
Speaker 1: Is that the goal for everything.
Speaker 4: To be chip based?
Speaker 2: I feel like that's possible and that is what we're
Speaker 2: creeping towards.
Speaker 1: But what is the ultimate goal?
Speaker 3: So we asked l and he said, while COVID accelerated
Speaker 3: digitization in a lot of ways, it's great because it
Speaker 3: makes a lot of things more accessible for a lot
Speaker 3: more people.
Speaker 5: Technology allows people to have flexibility they didn't have twenty
Speaker 5: years ago. I grew up in the eighties. There was
Speaker 5: no cell phone. We had a landline. Did I have
Speaker 5: a computer system, Yeah, but it was huge. There was
Speaker 5: no such thing as putting an infotainment system in your automobile.
Speaker 5: The infotainment system was the radio based on the intenna
Speaker 5: signal that you got when you drove. So think about
Speaker 5: all the things that we're able to do now due
Speaker 5: to the improvement that the semiconductors made on everyday life.
Speaker 5: There was no such thing as telehealth when I was
Speaker 5: a kid. The ability to actually do your doctor's appointment
Speaker 5: on a computer screen. And so when I say everything's
Speaker 5: more and more digital, it's more the fact that technology
Speaker 5: is enabling us to do things now in ways we
Speaker 5: couldn't do ten or fifteen or twenty years ago.
Speaker 2: Yeah, these things are a really huge part of our lives,
Speaker 2: personally at work, just moving around in public spaces. But
Speaker 2: how has the shortage affected those areas of our lives?
Speaker 3: Well, because so much of our life has become digitized,
Speaker 3: the chip shortage has kind of had waves of effects.
Speaker 3: So you think back TT when people were saying they
Speaker 3: couldn't get cars, or was taking U so long to
Speaker 3: get laptops early in the pandemic. Yeah, chip shortage, But
Speaker 3: now it just feels like there's a shortage of everything
Speaker 3: which could be related to the chip shortage.
Speaker 2: So we've touched on some of the factors in the
Speaker 2: chip shortage, but what we really need to understand is
Speaker 2: how this even started.
Speaker 3: All said is all about supply and demand.
Speaker 5: So I would say, at the big picture, high increased
Speaker 5: demand capacity that had increased, and then other components of
Speaker 5: the supply chain had their own set of unique challenges
Speaker 5: with made it harder to produce those components. All of
Speaker 5: those things happening at the same time is what led
Speaker 5: to the chip shortage that we face today.
Speaker 2: Just like we've highlighted in a lot of other labs,
Speaker 2: when COVID hit, it changed everything, and that is true
Speaker 2: for this as well. A lot of things moved to
Speaker 2: digital platforms in a really short.
Speaker 1: Amount of time. Al said.
Speaker 2: The supply chain shortages meant that there was about five
Speaker 2: percent more demand then manufacturers could supply, but the pandemic
Speaker 2: took that and pushed it to twenty percent.
Speaker 1: That is four times larger.
Speaker 3: People move so many things online, work, meeting, school, and
Speaker 3: everybody needs to have a device, and then you need
Speaker 3: better routeries, and then you need more and more and
Speaker 3: more accessories, all of these things that were just driving
Speaker 3: demand through the roof, but manufacturers of chips didn't have
Speaker 3: the opportunity to increase output just as fast. So there's
Speaker 3: this incredible imbalance. And then on top of that, in
Speaker 3: different places, as the pandemic is ripping through the population,
Speaker 3: there's worker shortages. Then there were companies having issues with
Speaker 3: components having trouble keeping up with the demand to make chips.
Speaker 3: Companies are dealing with this in a few different ways.
Speaker 3: Intel specifically is spending between seventy to seventy five billion
Speaker 3: dollars globally to increase their ability to produce chips, but
Speaker 3: he says it takes time to do that.
Speaker 5: It takes three years to build a semiconductor fab three years.
Speaker 2: A semiconductor fab is a semiconductor fabrication plant, so it
Speaker 2: is a special facility with the specific purpose of making
Speaker 2: semiconductor chips.
Speaker 5: So everything that we've announced within the last year or
Speaker 5: two won't not be online until twenty twenty four to
Speaker 5: twenty twenty five because the scale and the size of
Speaker 5: the facilities are just so large that they take a
Speaker 5: while to build and equip.
Speaker 2: I understand to specialize, but I also feel like people
Speaker 2: have thrown up apartment buildings and things like this. Is
Speaker 2: that facility taking so long? Those things are going up fast.
Speaker 2: It's like, Oh, they're breaking ground. Oh they're accepting applications
Speaker 2: for lease that.
Speaker 1: Pool and everything. How did you get that water up there?
Speaker 5: Your first step is to build the facility itself, and
Speaker 5: you're talking about something the size of four or more
Speaker 5: football fields, so you're building out that actual physical structure.
Speaker 5: The next component comes. You have to equip it, so
Speaker 5: all that floor space generally has very sophisticated and large
Speaker 5: pieces of equipment that either do things from using white
Speaker 5: to essentially print the circuitry pattern on a wafer. That
Speaker 5: includes the machines that move the wafers all around. There's
Speaker 5: a huge amount of equipment that actually goes into the building.
Speaker 3: Of the facility, and beyond just the physical facility. You
Speaker 3: need people in the facilities to actually do the work
Speaker 3: putting these chips together.
Speaker 5: And then while you're also doing that, you're hiring the
Speaker 5: workforce to be able to come in and manage it.
Speaker 5: That workforce includes significant amount of engineering talent at the bachelor,
Speaker 5: master's and PhD.
Speaker 2: Level as well, and companies are trying to find different
Speaker 2: ways to find workers because you need a lot of
Speaker 2: different skill sets to make more chips.
Speaker 5: We have to have construction workers, and those construction workers
Speaker 5: have to be specialized welders and electricians to actually build
Speaker 5: the facilities. Then if we get there, we have to
Speaker 5: be able to staff them. Some of those workers could
Speaker 5: be ensuring that engineering talent in the United States, most
Speaker 5: of which come from foreign countries. If those folks want
Speaker 5: to work in the US as engineers, at our companies.
Speaker 5: We should hopefully have an immigration system that allows them
Speaker 5: to do that.
Speaker 3: That's such a great point. You need people. I think
Speaker 3: a lot of folks when they think about semiconductor fabrication.
Speaker 3: If they're thinking about it, they're thinking about machines, make
Speaker 3: more machines. But you need talented individuals to do that work.
Speaker 2: We're going to take a quick break, but after the break,
Speaker 2: we're going to get into the policy behind chip manufacturing.
Speaker 2: We're back and next week we're talking all about the
Speaker 2: digital divide with a Cold Turner lead. We're gonna talk
Speaker 2: all about who has access to Internet, who doesn't, and
Speaker 2: how the gap disproportionately affects low income people and.
Speaker 1: People of color.
Speaker 2: We've been talking with Al Thompson, the vice president of
Speaker 2: US and Canadian Government Affairs at Intel. So far we've
Speaker 2: learned what a chip is, what it's made of, and
Speaker 2: how basically everything in our lives is becoming more and
Speaker 2: more digitized, which means more chips. Now, we want to
Speaker 2: talk about the cost difference between manufacturing in the US
Speaker 2: and in countries like China, Taiwan, South Korea, and Japan,
Speaker 2: where we know they're doing a lot of chip fabrication.
Speaker 2: This means we kind of have to understand the history
Speaker 2: of chip making and some of the policy that's surrounded.
Speaker 2: In nineteen ninety, the United States made around thirty seven
Speaker 2: percent of the semiconductor chips in the world. Fast forward
Speaker 2: to twenty twenty two and we now make around twelve percent.
Speaker 2: Europe also saw a similar shift from making forty four
Speaker 2: percent of the semiconductor chips to now only nine percent.
Speaker 5: So thirty years ago, close to eighty percent of the
Speaker 5: world semiconductors or manufactured in the United States and Europe,
Speaker 5: and twenty percent or so were manufactured in Asia. It
Speaker 5: is now completely reversed. Eighty percent of the world semiconductors
Speaker 5: are manufactured in Asia, divided between Japan, South Korea, Taiwan,
Speaker 5: and China. Why did that happen. That happened because foreign governments,
Speaker 5: recognizing the foundational nature of semiconductors and their value, created
Speaker 5: policies to attract manufacturing in those geographic locations, and the
Speaker 5: United States didn't do the same.
Speaker 2: So what China did is they made it more appealing,
Speaker 2: and the way that they did that was by creating
Speaker 2: these tax and tariff exemptions to sustain and develop its
Speaker 2: chip industry. Tariffs are for the important exports of goods,
Speaker 2: and so if there are exemptions that means that you
Speaker 2: don't got to pay so much to or export goods,
Speaker 2: that is very appealing.
Speaker 3: You're basically subsidizing the cost to manufacture something. If it's
Speaker 3: cheaper for me to make my chips in China, I'm
Speaker 3: making the chips in China. And so it's advantageous for China,
Speaker 3: right because you may say, well, why would they make
Speaker 3: such a deal. Not only are the chips being made
Speaker 3: in China in their country, that also reduces China's reliance
Speaker 3: on chips from other countries, so they don't have to
Speaker 3: look to Taiwan or you know, any other country to
Speaker 3: do this. We've seen this recently in India, Japan, and
Speaker 3: South Korea. They've all passed tax credits and subsidies for
Speaker 3: chip makers. Recently, the European Union has been looking at
Speaker 3: finalizing its own Chips Act legislation, which will hold billions
Speaker 3: of dollars in funding to make up for that large
Speaker 3: drop in chip production. So that created a huge gap
Speaker 3: in the cost of operating and manufacturing in these different places.
Speaker 5: At the end of the day, there's a thirty percent
Speaker 5: cost difference between building and operating factories in Asia compared
Speaker 5: to the United States.
Speaker 3: Thirty percent feels big to me, So what are we
Speaker 3: going to do to close that gap. Congress actually passed
Speaker 3: the Chips Act that's part of the National Defense Authorization
Speaker 3: Act in twenty twenty one.
Speaker 2: The bill has around fifty two point five billion dollars
Speaker 2: in funding for the semiconductor industry.
Speaker 3: But passing isn't the end all, be all. They haven't
Speaker 3: formally budgeted out any of that funding. In order to
Speaker 3: actually put the dollars behind the Act, we need to
Speaker 3: fund the Bipartisan Innovation Act. Alice saying companies want Congress
Speaker 3: to pass that bill so that they can get the
Speaker 3: money the fifty two point five billion that people said
Speaker 3: when we would get in twenty twenty one with the
Speaker 3: Chips Act.
Speaker 5: What the Bipartisan Innovation Act would do is eliminate that
Speaker 5: cost delta a thirty percent. If you take away that
Speaker 5: cost delta, it's much easier to drive investment here. That
Speaker 5: has two benefits, not in terms of just job creation,
Speaker 5: but it improves supply chain resiliency because over the last
Speaker 5: half a century, company rewarded for the efficiency of their
Speaker 5: supply chain, not necessarily the resiliency of their supply chain.
Speaker 5: Our CEO pac Ellsinger always says that we've need a
Speaker 5: transition from a just in time delivery system to a
Speaker 5: just in case delivery system in supply chain, and the
Speaker 5: Bipartisan Innovation Act is designed to support industry by removing
Speaker 5: that thirty percent cost gap, so it's much more cost
Speaker 5: competitive to build facilities. In the United States.
Speaker 2: All said, the way for companies to shift to a
Speaker 2: more resilient supply chain is to go from a just
Speaker 2: in time manufacturing model, which is when companies create items
Speaker 2: as needed to adjust in case model, where companies do
Speaker 2: the opposite of that, where they make enough product in
Speaker 2: advance and have it in excess.
Speaker 3: It feels like we're hitting on this distinction between efficiency
Speaker 3: and resiliency, and so when it comes to chip manufacturing,
Speaker 3: what does it actually mean.
Speaker 2: A big part of this is having a more diverse
Speaker 2: supply chain so production doesn't stop if one part of
Speaker 2: that production process is compromised.
Speaker 3: And that's part of what this push for chip factories
Speaker 3: in the United States is about. But funding for those
Speaker 3: factories installed in Congress in June. Global Wafers a Taiwanese
Speaker 3: semiconductor maker, the third largest one in the world, said
Speaker 3: they would build a five billion dollar factory in the
Speaker 3: United States, but only if the government helps pay for it.
Speaker 3: They're going to put a twelve billion dollar plant in
Speaker 3: Phoenix to produce the most advanced chips, but the CEO
Speaker 3: Mark Lucid. Development would only move forward if the government
Speaker 3: would make up for TSMC's running costs difference between the
Speaker 3: United States and Taiwan. And although Intel had previously had
Speaker 3: plans to have a twenty billion dollar factory in Ohio,
Speaker 3: because those funds haven't been distributed, Intel put a freeze
Speaker 3: on construction and postponed its groundbreaking ceremony not a week,
Speaker 3: but indefinitely until Congress funds the chip pack. There are
Speaker 3: a lot of roadblocks to even starting to address this shortage.
Speaker 3: We asked ol what other ways the supply chain could
Speaker 3: look different.
Speaker 5: Instead of having a supply chain where eighty percent of
Speaker 5: it is concentrated in one part of the world, and
Speaker 5: of that half that eighty percent is concentrated in two countries,
Speaker 5: meaning anything that would go wrong in that part of
Speaker 5: the world could lock down the supply chain, a resilient
Speaker 5: supply chain means weight. We have robust manufacturing and passing
Speaker 5: in Europe. We have robust manufacturing passed in the US,
Speaker 5: so there are no more single points of failure. What
Speaker 5: the just in time delivery system essentially rewarded was keeping
Speaker 5: things concentrated in low cost areas that will allow you
Speaker 5: to manufacture cheaply, ship it and get it just in
Speaker 5: time to where you need to put it back on
Speaker 5: a store shelf or put it into a product so
Speaker 5: it could be shipped. And that works in terms of
Speaker 5: speed and cost. But the problem is that creates single
Speaker 5: points of failure, and if one of those points fails,
Speaker 5: you can't get the product out the door. So what
Speaker 5: happened in the auto industry. What happened in the auto
Speaker 5: industry was the chip that essentially control rolls your window,
Speaker 5: or warms your seats, or controls your power system. If
Speaker 5: there's a problem manufacturing one of those, that small chip
Speaker 5: is the reason why our new car can't move off
Speaker 5: a lot.
Speaker 2: This means more factories to produce these chips and meet
Speaker 2: a demand that has skyrocketed.
Speaker 5: So demand for chips is going to increase every year
Speaker 5: by five percent between now and the end of this decade.
Speaker 5: To meet that demand, meeting meeting people needing products that
Speaker 5: include semiconductors, capacity or the number of facilities has to
Speaker 5: expand globally by fifty seven percent.
Speaker 2: Al says a success of a semiconductor company is driven
Speaker 2: by the ability to invest more in Moore's law, that
Speaker 2: law that says there should be more transistors on a chip.
Speaker 4: Every two years, it should double.
Speaker 2: So that chips can evolve and become more leading edge.
Speaker 2: These go into our iPads, our computers, our cell phones.
Speaker 3: I'll send. Any efforts to address supply chain shortages in
Speaker 3: the future need to be a balance of chips that
Speaker 3: are already in production, so kind of mature chips and
Speaker 3: new cutting edge chips.
Speaker 5: The challenge and the reason why it's so hard is
Speaker 5: the chips that you need tend to be the older chips,
Speaker 5: and those are harder to maintain over time. Because More's
Speaker 5: law requires you to kind of continue to push forward
Speaker 5: toward more capable chip and all of the resources not
Speaker 5: necessarily in physical material but tools and manufacturing processes. You
Speaker 5: don't have as much of that as you used to
Speaker 5: ten to fifteen years ago.
Speaker 2: So it's not necessarily the materials that are the issue
Speaker 2: in the chip shortage, it's the manufacturing technology.
Speaker 1: We need more of the older chips.
Speaker 2: But in order to stay on the leading edge with
Speaker 2: our technology, a lot of companies have invested more in
Speaker 2: modern chips.
Speaker 3: So how do you address these pitfalls? These are in
Speaker 3: direct opposition? So how does the chip industry deal with this?
Speaker 3: And then I'm curious, like, if all of this is
Speaker 3: going on, and we see how it's working in other countries,
Speaker 3: why didn't our government anticipate this?
Speaker 2: TV you saw what other folks were doing. The government
Speaker 2: knows what everybody else is doing. Everybody knows what everybody's doing.
Speaker 2: Everybody's looking at everybody's paper. We should have been able
Speaker 2: to anticipate this and put some stuff in place.
Speaker 3: And because we didn't, now we're playing ketchup Al said
Speaker 3: that COVID changed the way the United States now approaches
Speaker 3: chips and manufacturing. He said, there has to be more
Speaker 3: focused on research and development or R and D. Then
Speaker 3: there is the investment in starting materials. Right. We touched
Speaker 3: on that with doctor Kate Butner in our previous lab
Speaker 3: about metals. There's a limited supply of various elements, metals
Speaker 3: and fossil fuels, and so the upside of doing research
Speaker 3: and development is that it can help us use things
Speaker 3: that are available locally or at least on this side
Speaker 3: of the hemisphere, and all of that feels really important
Speaker 3: to focus on when we think about closing that chip
Speaker 3: production gap.
Speaker 2: All said, Intel spends about fifty team billion dollars a
Speaker 2: year on research and development, and that's one of the
Speaker 2: reasons why only a few companies can do that is
Speaker 2: because you have to invest so many resources to conduct
Speaker 2: that research.
Speaker 5: There's no getting around that. Moore's Law is incredible. Moore's
Speaker 5: Law is also expensive. One of the things that's been clear,
Speaker 5: and this is why the Innovation Act is so important,
Speaker 5: is federal pre competitive research has kind of stayed flat,
Speaker 5: and we need to invest in these because the semiconductor shortage.
Speaker 5: We talk a lot about it in the United States
Speaker 5: given its impact, but it's a global shortage and the
Speaker 5: rest of the world has woken up to the fact
Speaker 5: that the companies that have semiconductor manufacturing and R and
Speaker 5: D are going to be the ones that have a
Speaker 5: large say in the direction of the global future, and
Speaker 5: so our ability to properly invest is really really important.
Speaker 3: Investing in the chip industry is critical for the United
Speaker 3: States to remain competitive in technology, and because our lives
Speaker 3: are increasingly depending on technology, that also means meeting the
Speaker 3: higher need for chips through manufacturing them here. I think
Speaker 3: all the points that Al brought up are so important.
Speaker 3: I think one that I really want to highlight is jobs.
Speaker 2: Having these semiconductor fabrication plants in the United States and
Speaker 2: doing the production here rather than getting it from other
Speaker 2: countries not only helps us economically from a standpoint of oh,
Speaker 2: folks will need to purchase from us, but it also
Speaker 2: creates jobs for lots of Americans and immigrant people who
Speaker 2: need work. So not only will we be saying on
Speaker 2: the leading edge of technology, but also invigorating our economy
Speaker 2: from a workforce standpoint.
Speaker 3: Yeah, and it feels like it's this intersection of all
Speaker 3: these things we've talked about, you know, in a previous
Speaker 3: episode where we talked about metals, one of the things
Speaker 3: that we talked about is the geospatial distribution of different
Speaker 3: source materials and different elements. And part of this chips
Speaker 3: shortage what we're seeing is due to the reliance of
Speaker 3: the semiconductor manufacturers on neon. Neon is primarily coming out
Speaker 3: of Ukraine, you know, we have the war between Russia
Speaker 3: and Ukraine. When that started earlier in the year, that
Speaker 3: production stopped, and so you know, it's important to recognize
Speaker 3: that the United States and many other places have been
Speaker 3: outsourcing manufacturing for years. I just saw in a New
Speaker 3: York Times newsletter, their Tech newsletter from Shira Oviday. She
Speaker 3: talked about, you know, this jumble of the chip industry.
Speaker 3: So yes, there's a shortage. In some cases, we're seeing
Speaker 3: trucks and cars that can't be completed. They're manufacturing cannot
Speaker 3: be completed because they don't have chips.
Speaker 2: I feel like a lot of people have seen that
Speaker 2: happen in their counties and their states, where they say, oh,
Speaker 2: we're gonna build this bridge, or we're gonna build these facilities,
Speaker 2: and you know, the money doesn't come through, and they say, oh,
Speaker 2: in five more years and ten more years, and then
Speaker 2: ten years turns into twenty years, turns into their years,
Speaker 2: and it almost never gets done. And what that does
Speaker 2: is not just oh it's just sitting there. It causes
Speaker 2: a disruption, and people are counting on these things to
Speaker 2: be built because they're counting on the jobs to be available.
Speaker 2: So somebody may be holding out hope that when it
Speaker 2: opens that they will have an opportunity to get work.
Speaker 2: And if the money doesn't come through because of some
Speaker 2: government stuff that we have no control over because our
Speaker 2: congress people are over there, Jipper Jabberin, I mean, we
Speaker 2: end up suffering. But just as we're seeing a shortage
Speaker 2: in the United States, in other places like South Korea,
Speaker 2: chips are piling up. You know, they're starting to see
Speaker 2: people reducing their orders and so they have more chips
Speaker 2: than they can sell. And so it's hard to understand,
Speaker 2: like how we have both a shortage and a surplus
Speaker 2: at the same time.
Speaker 3: But a lot of this also has to do with
Speaker 3: the trajectory of the economy. There feels like there's a
Speaker 3: looming recession, so maybe people aren't buying as much, which
Speaker 3: decreases demand. But also note that I said the surface
Speaker 3: plus was in South Korea. That gets back to what
Speaker 3: we were saying earlier in this episode about incentivizing production
Speaker 3: here in the United States.
Speaker 2: Right and when we think about the production and manufacturing,
Speaker 2: the US is playing catchup right now.
Speaker 1: That's basically what.
Speaker 2: Al told us, And it's going to take a long
Speaker 2: time for the US to catch up to some of
Speaker 2: these other Asia based companies, so they'll likely dominate manufacturing
Speaker 2: for the foreseeable future. And even if US manufacturing increases,
Speaker 2: one natural disaster global pandemic can, as we've seen, can
Speaker 2: disrupt the whole thing.
Speaker 1: All right, it's time for one thing. What's your one
Speaker 1: thing this week's?
Speaker 2: Ee?
Speaker 3: My one thing I already mentioned very briefly in the conclusion,
Speaker 3: but it is the on Tech newsletter from the New
Speaker 3: York Times with Shira Oviday. I like getting this newsletter
Speaker 3: and just getting an overview of what's going on. So
Speaker 3: the latest issue told me about the chip shortage and
Speaker 3: the chip surplus. It helped me get a better understanding
Speaker 3: of what was going on in addition to our interview
Speaker 3: with al. But also it told me about some folks
Speaker 3: selling personal data in China Twitter, seeing the Indian government,
Speaker 3: how Apple's been pretty tight lipped on chips, especially with
Speaker 3: their M one processor or M two processor that they
Speaker 3: have out with their anology. It just gives me everything
Speaker 3: and I like it.
Speaker 1: How that sounds perfect for my friend?
Speaker 3: I want to know it all. What's your one thing? Tt?
Speaker 2: My one thing this week is something that came across
Speaker 2: my Instagram feed and it was research out of Northwestern
Speaker 2: So they said May twenty fifth, they were able to
Speaker 2: develop the smallest ever remote controlled robot.
Speaker 1: And it looks like a little tiny crab.
Speaker 2: It's about a half a millimeter wide, which half a
Speaker 2: millimeter is about the size of the tip of a pen.
Speaker 2: And so it's really really cool to see that they
Speaker 2: were able to make something so tiny. And so when
Speaker 2: you think of applications for something like this, because you know,
Speaker 2: the first thing is what do we need with that
Speaker 2: small robot? But think about some tasks that may need
Speaker 2: to be done in very very tight spaces. If you
Speaker 2: can get this robot to do some of the things
Speaker 2: you wanted to do, it's the perfect size. And so
Speaker 2: this is a really brilliant first step in the right
Speaker 2: direction to the miniaturization like we talked about in this
Speaker 2: episode with chips of all this technology.
Speaker 3: Wow, that's it for LAP seventy one. What did you think?
Speaker 3: Did you learn something new about the chip shortage? Do
Speaker 3: you think we're gonna get the funding for that for
Speaker 3: those factories to be built? I have questions. Call us
Speaker 3: at two zero two five six seven seven zero two
Speaker 3: eight and tell us what you thought. Also, you can
Speaker 3: call us and give us an idea for a lab
Speaker 3: you think we should do this semester. Remember call or
Speaker 3: text two zero two five six seven seven zero two eight,
Speaker 3: and don't forget that there is so much more to
Speaker 3: dig into on our website. There'll be a cheap key
Speaker 3: for today's lab, additional links and resources in the show notes.
Speaker 2: Plus you can sign up for our newsletter check it
Speaker 2: out at Dope Labs podcast dot com. Special thanks to
Speaker 2: today's guest expert Al Thompson. You can find him on
Speaker 2: Twitter at at nine eight three, and you can find
Speaker 2: us on Twitter and Instagram at Dope Labs Podcast.
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Speaker 2: Sho, and you can find Zakiya at z said So.
Speaker 2: Dope Labs is a Spotify original production from Mega Own
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Speaker 3: Our producers are Jenny Radley, Mask and Lydia Smith of
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Speaker 2: Editing and scoring by Rob Smerciak and Griffin Jennings, Mixing
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