Should components for military use be made in a dedicated secure facility?

That’s the basic thinking behind a $3.5 billion allocation by the US government to support an undisclosed chipmaker, presumably Intel, to develop a classified advanced semiconductor development project. The monies at the root of the issue touched off yet another question, that is, whether Chips Act funds were misused when routed to the so-called Secure Enclave program.

The Chips Act, of course, is the foundational legislation upon which the US strategy of reclaiming semiconductor manufacturing dominance is built.

Years ago, the major semiconductor foundries, including Intel, Motorola and others, had designated government segments. Their demise more or less concluded with the rollout of new defense procurement policies, now known as the Perry Initiative.

The memo, penned 30 years ago to the month by then Secretary of Defense William Perry, transformed acquisition practices among military contractors. Among other reforms, it mandated use of industry (non-government) performance standards and specifications, which opened the door to broad use of commercial off-the-shelf parts where available for systems designed and built for government use.

OEMs welcomed the decision, saying the new policies would cut red tape, reduce duplication in inventory, and slash costs inherent in maintaining the higher levels of traceability and reporting that came with being a military vendor. A program manager of a major semiconductor manufacturer told me at the time their company spent $100,000 per line item per year in administrative costs alone – and the number of part numbers they carried was in the tens of thousands.

Shortly thereafter, the supply chain became truly distended, and even the most-sensitive military programs became reliant on materials and components from a host of potential adversaries or unreliable sources.

But cycles are inevitable, and the trend today is toward trusted and secure supply chains. The $280 billion Chips and Science Act appropriated almost $53 billion to semiconductor manufacturing, research and workforce training. One of the tenets, however, as understood by the Congressional gatekeepers who wrote or signed on to the legislative package, is that the funds set aside for the Chips Act were to go to commercial efforts.

To be sure, Congress is broadly biased toward enhancing national defense capabilities. The Secure Enclave, as described in Politico, would make and package electronic components in a special facility for defense and intelligence applications. And the media source quotes several high-ranking members of Congress who support the initiative.

The criticism then, as reported, generally centers on which branch of government should pay, conveniently ignoring that the source of all funding – the taxpayer – is ultimately the same.

But there’s another, far more complex issue than simply which department gets stuck with a bill that equals approximately 0.0006% of the US budget: If semiconductors require a completely controlled facility, will that extend to other components – including printed circuit boards and assemblies – and if so, when?

These are legitimate policy debates, ones that should be held openly so that all the stakeholders have a chance to weigh in. Much of the domestic electronics industry is supported, either directly or indirectly, by US government programs. If a single industry player were to come along and carve out a piece of that pie for itself, with no open bidding or other competitive forces to ensure best practices and continued technological advancement, where’s the guarantee the intended progress will be made? And, keeping with the basic theme of the Perry Initiative, will development become bogged down in bureaucracy at the expense of agile, flexible decision-making and engineering?

It all feels a little inspired by Oppenheimer. The movie itself is a work of art and a great character piece. But the tech the Manhattan Project bore was the product of collaboration by teams of scientists from all around the world. No single university authored all the ideas or engineered the end-product.

Coming back to my initial question, should components for military use be made in a dedicated secure facility? The pros are less convincing than the cons, in my opinion.

Shared expertise would help. So would transparency.

Final words. See you at PCB East in June! The free exhibition, featuring more than 65 leading suppliers and a full day of technical presentations, is June 5 in Boxborough, MA. And registration is now open for PCB West, the leading conference and exhibition for the printed circuit design and engineering industry.

Mike Buetow is president of PCEA (pcea.net); mike@pcea.net.

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