Stronger together: Investing in collaboration amid the resurgence of the U.S. semiconductor industry

In the future, collaborations in the semiconductor industry could become a decisive competitive advantage in the race for innovation, sustainability and the best talent. To achieve this, however, the industry must shift away from silo thinking and focus on fostering trusted partnerships.

Earlier this year, the U.S. administration set a goal for the U.S. to produce 20% of the world’s most advanced semiconductor chips by the end of the decade. This ambition underscores how the CHIPS and Science Act will boost domestic research and manufacturing of semiconductors. Investments from the Act will help reduce dependence on other nations and provide the country with more resources to compete in the AI race. The CHIPS and Science Act also places significant emphasis on accelerating innovation within the semiconductor industry. This acceleration will only be possible by pooling resources, knowledge, and expertise.

In this context, the CHIPS and Science Act fosters a better environment for collaboration among governments, industry stakeholders, and academic institutions. However, to fully realize its potential, a paradigm shift is needed within the industry. The vertical autonomy that worked well in the past won’t be effective moving forward. Instead, collaboration along the value chain will become more important to overcome the technological, economic, and ecological challenges that lie ahead. A fragmented semiconductor industry cannot push boundaries when it comes to addressing the industry-wide and highly interconnected tasks of the future.

Innovation: Mastering the next wave of innovation together

The Covid-19 pandemic has demonstrated how a lack of integration can lead to inefficiencies and highlighted the vulnerability of our global supply chain. One industry sector that responded to unexpected needs with unprecedented speed through collaboration is the healthcare and life science industry. The industry’s response to the pandemic showcases how innovation is no longer driven by one or two companies but by many players in an extended partner ecosystem.

Intermolecular is pursuing a similar approach for the semiconductor industry. While Merck develops novel materials, Intermolecular works with our customers to rapidly prototype and test these materials, accelerating the transition from the lab to manufacturing.

Another noteworthy example is Athinia, Merck’s partnership with Palantir. Athinia serves as a digital hub for the semiconductor industry, connecting participants across the value chain to a single source of real-time data, thus empowering them to accelerate innovation and manufacturing through data collaboration. The resulting impacts are impressive: higher yields, enhanced tool availability, quicker resolution of quality issues, and less product waste.

Sustainability: Securing our future as a sustainable and thriving industry

The increased demand for chips and advanced manufacturing processes will significantly increase semiconductor industry emissions in the immediate future, companies must adopt new plans to reduce greenhouse gas emissions without delay. While the semiconductor industry has made sustainability commitments to reduce greenhouse gas emissions, these efforts are not enough to limit the increase of global average temperatures to 1.5°C above pre-industrial levels, as outlined in the Paris Agreement. If the current growth path continues unchecked, carbon emissions from semiconductor production are projected to rise by about 8% annually in the coming years, not peaking until around 2045. This outcome leaves chip manufacturing emissions at 168 megatons per year in 2050 and nearly 5 gigatons in total, significantly above net zero. Overcoming this gap will require deeper industry-wide collaboration.

At Merck, we are deeply committed to this cause. We are collaborating closely with our partners to create more sustainable solutions and products from our R&D. For example, in collaboration with Micron, we have successfully developed new low global warming potential (GWP) gas solutions to replace traditional high GWP materials in semiconductor manufacturing.

Our commitment also includes leveraging knowledge and research expertise to identify innovative and sustainable solutions. In partnership with Intel, we are funding a new three-year academic research program in Europe. This program specifically leverages AI and machine learning technologies to drive breakthroughs in innovative and more sustainable semiconductor manufacturing processes and technologies.

Talent: Meeting the workforce demand in an industry that outpaces the pipeline of future talents

The race for the best talent in the semiconductor industry continues unabated. Projections indicate that the industry is poised to add nearly 115,000 chip design and manufacturing jobs by 2030. However, nearly 60% of these new positions are at risk of remaining unfilled. Closing this talent gap is not only critical to the success of the CHIPS and Science Act but crucial to the semiconductor industry as a whole. To fully capitalize on the generational opportunity that lies ahead, increased collaboration between industry, government, and academia is urgently needed. Sponsored research, student engagement initiatives, workforce training, and community outreach will play significant roles. At Merck, we endorse a holistic approach to ensure that the anticipated demand for talent is met. As part of our workforce strategy, we have robust university relations and a veterans’ program in place to nurture the industry’s and our own talent pipeline. You may want to read my previous blog article for more details on how Merck tackles the war for talent in the semiconductor industry.

Collaboration is the lifeblood of our industry

Innovation, sustainability, talent – the interconnected and multi-dimensional challenges the semiconductor industry is facing can only be effectively addressed through genuine collaboration. The CHIPS and Science Act goes beyond merely infusing funds into the ecosystem. It presents an exceptional opportunity to pursue collaborative innovation models where value is created not only within the companies in our industry, but also at the interface between the company and its diverse set of partners. As a global company with roots in Germany, we take great pride in being part of this exciting momentum and are eager to participate in the next chapter of American innovation leadership, built on collaboration.