Trusted Defense Microelectronics: Future Access and Capabilities Are Uncertain

In April 2015, GAO found that the Department of Defense s DOD access to trusted leading-edge microelectronics faced challenging consequences stemming from manufacturing costs, supply chain globalization, and market trends, creating uncertainty regarding future access about U.S.-based microelectronics sources. Capital costs associated with producing leading edge microelectronics increase with each new generation of technology. Leading-edge microelectronics fabrication facilities can cost several billion dollars annually and rising capital costs of manufacturing have led to increased specialization and industry consolidation. Once dominated by domestic sources, the supply chain for microelectronics manufacturing is a global one primarily in Asia. Industry is largely focused on high-volume production driven by demand for consumer electronics. The rapidly evolving commercial microelectronics market has short life cycles, with little need to support older technologies. Conversely, DOD s needs for microelectronics are low-volume, unique, and, in some cases, for technologies for which there is no commercial demand. As a result, DOD s requirements have very little influence on the commercial market.