On this episode, Darren talks with Lieutenant General Thomas Horlander, who recently joined the Intel Public Sector Team, about the microelectronics supply chain and national security.
Thomas joined the army in 1983 after earning his bachelor’s degree in finance and then deciding the private sector was not for him. He joined the army for what he thought would be a three- to five-year career and ended up with 39 years of service, with his final position as Army Comptroller. He retired about a year ago and joined Intel.
Thomas is inspired at Intel by the great people and culture and meaningful mission. He appreciates the fundamental role that Intel plays in everyone’s everyday lives and the opportunity to influence the future of the country.
When Thomas joined the army in 1983, microelectronics was in an embryonic stage; they didn’t even have computers. As a young officer, he worried whether he had enough D-cell batteries to operate radios. So Thomas considers himself a “digital immigrant” since he has experienced the evolution that happened with silicon.
Society and the military are now dependent on silicon, and the supply chain around microelectronics is highly important: it’s a national security issue. Thomas says the microelectronics industry market shares center stage with the oil industry as a center of gravity when it comes to national and global security and economic stability.
In the military, the vehicles and weapons systems are all microelectronics-enabled. They allow the military, for example, to be more precise and more lethal with less weight, a more accurate locating system, and more reliable communications among other things.
Our dependency on microelectronics spurred the recent Chips Act. While the need was apparent before the Ukraine crisis, witnessing what Ukraine has been able to do because of microelectronics spotlighted the necessity of securing the supply chain.
Thomas has been a student of national security his entire career, and he looks at it more holistically than just defense and the role of the armed forces. To him, national security is good governance and the rule of law. It’s a proper and functioning economy, effective academia, health care and, of course, the armed forces. And almost all of the professions across American society play a role in providing national security. From this perspective, just about every fiber of what it takes to provide national security relies on microelectronics.
The Chips Act was necessary, Thomas says, because of the huge imbalance across the ecosystem of the industry. While not the ultimate solution of the redistribution of balance, the Chips Act is an important first step, and it will have an impact on national security. When you unpack the core activities of the microelectronics industry, from where the rare earth elements come from to who makes the equipment to design and manufacturing, it’s apparent what an incredible mosaic of activity this is and why it’s so difficult to have a clear picture on all of it. A microchip might change hands ten times in a manufacturing process.
COVID, in many ways, exposed this complicated and fragile supply chain when, for example, factories were shut down in Malaysia, Ireland, or China because of a COVID outbreak, and all of a sudden you can’t ship a car because it doesn’t have a chip in it. Most people didn’t realize the big global imbalance that currently exists. Only eight percent of silicon is manufactured in the United States. Seventy or eighty percent is manufactured in Southeast Asia, specifically three countries: China, South Korea, and Taiwan.
With this knowledge, it is obvious that rebalancing the ecosystem of the global supply chain and returning capacity and capability to the United States is of the highest importance. No industry should have single points of failure, and this is a concern in the microelectronics industry.
The federal government, the defense industrial base, and the ecosystem are all starting to see this problem, and the Chips Act is representative of this recognition that we have to do something. Thomas knows of six companies right now that have said they are going to be investing in fabs on US soil in the next eight to ten years.
One of those companies is, of course, Intel. Intel is currently building fabs in Ohio, Arizona, and New Mexico. Re-domesticating capacity and capabilities in the microelectronics industry are not only necessary for national security but will bolster the local economies and provide opportunities for workers, invigorating whole communities.
The infusion of capital investment from the Chips Act is fundamentally important because this is a race against time. Thomas is optimistic about the future of the industry and the action that is being taken to assure a bright future and continued innovation.
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