Washington, D.C. — The U.S. Department of Defense (DOD) must urgently adopt a new, coordinated strategy to ensure long-term access to advanced semiconductor technologies, according to a recent report from the National Academies of Sciences, Engineering, and Medicine. The report calls for a comprehensive plan that extends from the semiconductor supply chain to workforce development, arguing that America’s technological edge—and even its national security—depends on swift action.
The United States has long been a pioneer in semiconductor innovation, but in recent years its dominance has been threatened by global competitors and a shifting manufacturing landscape. While the CHIPS and Science Act of 2022 was a major step toward restoring U.S. leadership in the semiconductor ecosystem, the report emphasizes that the DOD must now go beyond legislation to form deeper partnerships with industry, academia, and other federal agencies.
It stresses that the Pentagon’s reliance on foreign-made chips presents serious vulnerabilities, as semiconductors power virtually every defense system—from advanced radar and communication tools to high-performance computing and artificial intelligence applications.
A Legacy at Risk: How the U.S. Lost Its Semiconductor Advantage
For decades, the Department of Defense was the driving force behind the birth of the semiconductor industry. During the mid-20th century, DOD-funded research fueled key breakthroughs that propelled both commercial and military innovation. The U.S. military became one of the world’s largest buyers of microelectronics, incorporating these technologies into everything from deterrence systems to sophisticated weapon platforms.
However, according to the National Academies report, that leadership is now “no longer guaranteed.” The domestic manufacturing base has steadily eroded, and the global supply chain has grown increasingly concentrated in foreign hands.
“The United States is heavily dependent on other nations for both commercial and defense semiconductor needs,” explained Liesl Folks, chair of the committee that authored the report and professor of electrical and computer engineering at the University of Arizona. “This dependence has created a challenging environment for the DOD, often slowing innovation and limiting flexibility. There is now a clear need for modernization, agility, and closer engagement with the private sector.”
The Geopolitical Stakes: Building Resilience at Home and with Allies
The report warns that the world’s most advanced chips—essential for military superiority—are still primarily produced overseas by a handful of companies. This reliance on foreign suppliers exposes the United States to potential supply disruptions and geopolitical risks.
To address this, the report recommends that DOD work alongside the Department of Commerce, Department of Energy, and other federal agencies to either reshore semiconductor production back to the United States or “friend-shore” it by establishing a trusted network of partner nations with reliable manufacturing capabilities.
Such an approach would not only reduce supply vulnerabilities but also help diversify the global semiconductor ecosystem. The ultimate goal, according to the report, is to ensure that America and its allies maintain control over the production of cutting-edge chips vital to both economic and national security.
Rethinking Partnerships: Breaking Down Bureaucratic Barriers
While the Pentagon recognizes the urgency of advancing microelectronics, the report highlights that bureaucratic and regulatory hurdles continue to slow progress. Complex procurement processes, outdated contracting models, and rigid administrative structures make it difficult for DOD to collaborate efficiently with fast-moving technology firms.
To overcome this, the report urges the DOD to modernize its engagement strategy with commercial semiconductor manufacturers. It suggests expanding on existing initiatives such as the Microelectronics Commons, a newly launched public-private partnership designed to bridge the gap between defense and industry. These partnerships can accelerate access to emerging technologies while sharing both risk and reward between government and private players.
A more flexible and transparent framework would also allow smaller and more innovative companies to participate in defense contracts—helping DOD tap into cutting-edge advancements that often originate in the startup ecosystem.
Investing in Next-Generation Semiconductor Innovation
The report underscores that long-term investment in transformative technologies is crucial. To remain competitive, DOD should prioritize funding for “leap-ahead” semiconductor research that goes beyond incremental improvements. This includes chips designed for extreme environments, high-power-density systems, and advanced materials that can handle complex defense operations.
Artificial intelligence and machine learning, two technologies central to modern defense systems, are also heavily dependent on access to vast quantities of high-performance chips. Without sufficient access to these semiconductors, the U.S. risks falling behind in areas like autonomous systems, cybersecurity, and predictive intelligence.
The report calls for DOD to take a more active role—not only as a funder but as a strategic partner—in shaping the direction of semiconductor R&D. Collaboration with universities, national laboratories, and private firms should form a cohesive ecosystem that keeps America at the forefront of technological innovation.
Modernizing Defense Systems to Keep Pace with Technology
Another critical concern is the modernization of DOD’s existing hardware and infrastructure. The development cycle for new defense systems can often span more than a decade, meaning that technologies integrated at the start of a program are already outdated by the time systems are deployed. This lag leads to costly retrofits, inefficiencies, and security vulnerabilities.
Moreover, Congress has traditionally prioritized funding for new systems rather than upgrades to existing ones. As a result, many aircraft, ships, and vehicles rely on obsolete chips that are expensive to replace and difficult to maintain. The report highlights that older chips not only underperform but also carry higher cybersecurity risks.
To address these challenges, the National Academies recommend a comprehensive modernization plan that enables faster adoption of new semiconductor technologies. DOD should integrate both hardware and software upgrades on a rolling basis—mirroring the continuous update models used in the private tech sector.
A proposed public-private initiative would also explore modern electronic design automation (EDA) tools that could streamline the process of replacing outdated chipsets. Such tools could drastically reduce the time and cost required to integrate new semiconductor components into existing platforms.
Closing the Semiconductor Workforce Gap
Beyond production and technology, the report identifies another looming threat to U.S. semiconductor leadership: the shortage of skilled workers. The demand for technicians, engineers, and computer scientists in the semiconductor field far exceeds supply, and this imbalance is expected to worsen over the coming decades.
Technicians are essential for operating the complex machinery that fabricates chips. Engineers drive innovation in device design and process development, while computer scientists build the software that enables efficient system performance. All three talent pipelines are currently strained, and the United States faces fierce competition for global expertise.
To combat this, the report calls for new educational models that emphasize flexibility and accessibility. Universities, industry leaders, and the DOD should collaborate to create short-term training programs, apprenticeships, and online learning opportunities that prepare students for high-demand roles in microelectronics.
Additionally, the report recommends aligning DOD’s workforce initiatives with ongoing CHIPS and Science Act programs managed by the National Institute of Standards and Technology (NIST) and the National Science Foundation (NSF). Immigration reform is also cited as an important tool to attract global talent to the U.S. semiconductor industry.
A Call to Action for America’s Technological Future
The National Academies’ report sends a clear message: the United States must act decisively to rebuild its semiconductor ecosystem if it hopes to maintain military and economic superiority in the decades ahead. The DOD’s success will depend not just on funding, but on its ability to collaborate effectively across government, academia, and industry.
If implemented, these strategies could reestablish the United States as the epicenter of semiconductor innovation—securing both its national defense capabilities and its position as a global technology leader.
The study, conducted by the Committee on Global Microelectronics: Models for the Department of Defense in Semiconductor Public-Private Partnerships, was sponsored by the U.S. Department of Defense and published by the National Academies of Sciences, Engineering, and Medicine—independent, nonprofit institutions that provide objective analysis to guide national science and technology policy.
As the world enters a new era of digital warfare, artificial intelligence, and interconnected systems, the call for semiconductor self-reliance has never been more urgent. America’s ability to innovate, defend, and lead will rest on how quickly it can reclaim mastery over the most essential technology of our time—the semiconductor.
Leave a Reply