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A chip is a small piece of silicon that contains circuitry that allows it to perform a specific function.

Chips are used in everything from phones and computers to cars and medical devices.

But growing demand and a worldwide chip shortage in 2022 has slowed growth in many industries.

We'll take a closer look at the chip shortage, talk about how it impacts you and what's being done to stop it.

Coming up on Economic Outlook.

We're back in the studio for a new season here on Economic Outlook.

And today we believe we have a great show for you.

The global chip shortage has slowed production in many industries like automotive and gaming, and delayed the rollout of new technologies.

Joining me today to talk more about semiconductors, chips and the chip shortage is Derek Lake, associate director of ND Nanoscience and Technology.

Derek, welcome.

Thanks, Jeff.

Great.

Great to be here.

Yes, we're glad to have you so.

So, obviously, the news has paid a lot of attention to semiconductors and chips and some of that.

I'm not sure everybody knows a lot about that.

So we thought we'd grab an expert today and pick your brain a little bit and help us understand that a little bit before we get into talking chips and semiconductors and such that.

Tell us a little bit about your background and tell us a little about ND Nano and what you do there.

Sure.

So I spent about 15 years in the chemical and materials industry and working for global materials companies.

And then about three years ago, I joined Notre Dame as associate director for Notre Dame Nanoscience and Technology.

And so we're a center, a campus that brings faculty together around nanoscale research, and we provide and support faculty to help bring them together to collaborate and also support their research ventures there at the university.

And which semiconductors is part of that.

Great.

You know, it's been exciting to watch the evolution of Notre Dame in recent years, in particular in the research space.

And so to watch ND Nano come on board and then the other space, so so kind of why we tapped you today then just because you mentioned semiconductors and chips and all that.

So I may use a few of those interchangeably.

I'm apologies for that.

So so for folks who aren't familiar with some of these terms talk to us a little bit about what a semiconductor or a chip is and why it's important to them.

Sure.

So we're talking about semiconductors.

It's a material just like the name says.

It's partially semi conductive.

So it falls somewhere between what, like a metal that would be conductive and a non and an insulator, which is not conductive.

And so these are these these wafers are made out of silicon.

And so similar to what you might think of sand and it's pure quartz material that they take and make into these, these silicon wafers.

And then those are have essentially nanometer scale wires and transistors and other features layered on top of those.

And then those are cut out and placed into what we would think as the chips.

And so then those are constructed into the housing and the packaging, which is very important, how all that fits together with on those scale.

And you've got those parts all that close together and they're generating heat so forth and how they, how they're put together that small scale is very important.

And so those all go together.

And so then if you would open up your phone or your computer or your television, really anything today you're going to see these chips and then and they're really pervasive across the ecosystem.

Right.

So so we hear a lot about it today.

But but obviously, as technology has evolved over time, they've been around for a while.

So how long have have we been dealing with semiconductors, would you say?

Yeah.

So it's a good they You know, we've been around for probably is electronics.

We're starting to develop then.

Yeah, exactly.

Exactly.

So in the 20th century, early 20th century.

Yeah.

So so going back to 60s 70s, those time frame.

Sure, those and so but probably way more what we think about is are modern microelectronics as it continues to scale down.

So you've you've had these advances in size and scale which have enabled these smaller devices like the phone, for example, if we think back to what was in place with like some of the computers that NASA when there was the the moon missions and things, they took up rooms.

And now we can do that with something that sits on a table.

So, so, so when to think about like my phone just using example.

Are there many chips in there or is it is it one that helps power it like help us give a feel for or my car or whatever?

My guess is it takes a whole series of these to sort of affect the work that's happening there.

Yeah.

So, so the chips will have different functions with them.

And so some of course are higher end.

So as you get new phones that come out, they're going to have higher end chips and then that control control the phone.

But we also may have a little bit of say kind of lower end that are providing power or you know, think about in your car to while those are going to be a little bit lower in chips, maybe with a controller for your seat or for your your automotive or your motorized mirror on the side or even, you know, some can help and control some of the sensors in the engine.

But what's important is that they all have different functions and also different environments.

They have to be in.

You know, the chip that will go into your car around the engine is going to have to have a lot more be able to sustain higher heats, for example, than maybe what's in your phone and have different functions.

Sure.

So in fascinating conversation, I appreciate I'm learning a lot already on this.

So so as we've been watching the news and we hear whether it's Apple saying we've got to slow down the release of the next iPhone or automakers saying we've got to slow production of our cars because we have this shortage.

Talk to us a little bit about the shortage and why we have why we have a chip shortage and how that's impact on the economy a little bit.

Yeah.

So so it's really interesting how this all came up.

And so number one to say is that the semiconductor supply chain is pretty complex.

It involves multiple steps around the globe.

And so the number one, you know, any time you have a complex supply chain like that, something can go wrong and it didn't go down.

So so the one thing to understand is there's a couple of different types of producers for chips, ones that are really designed them.

So they'll they'll kind of draw them up and make the designs and then but they don't actually have facilities that make them.

And then so what we think of as being the producers really, that they may design their own but they also will produce for other people.

And so in the US we're making around 10% of the chips today globally.

And East Asia is accounting really for closer to 70% of those with Taiwan, around 54% of them.

And so what happened is when you've got this extended supply chain and then in, it requires these complex environments to make them and so things can happen.

So the number one, when the pandemic started, the automotive industry, for example, decided that, hey, there's probably a recession coming.

And then people aren't going to be going anywhere, staying home.

So they they delayed or canceled orders for their chips.

However, we all know that happened as a result of that is we end up staying in and buying personal electronics, gaming things to help us work from home.

And so then the demand for personal electronics went up.

So these chip manufacturers, what they did is they switched over their production from the automotive chips to the the some of these personal devices and phones and that sort of thing.

And it's it takes a long time to switch over production.

And so when the automotive manufacturers came back and said, hey, we really need to get our chips now so we can continue production, it wasn't easy is just stopping what they're making and going back to it.

So is either the case that they could sell those chips into the personal personal computing or phone and gaming that sort of those devices or they had to completely retool their their manufacturing facility to go from automotive chips to these other types of chips.

Right.

So I'm continuing my conversation with Derek Lake, the associate director of Notre Dame, Nanoscience and Technology.

Derek, to take a quick break, we're going to go out into the field.

George Lepeniotis, my co-host, is out to add to the story.

George, let me toss it to you-.

Thanks, Jeff.

Speaking of microchips and things that make electronics work nowadays, I have the distinct privilege to be on campus at the University of Notre Dame.

I'm joined today by Professor Patrick Fay.

Professor, thank you for being with us.

It's my pleasure.

Professor right behind us is what I'll call your baby.

It is a it's got a very explicit name, but I call it it's a nanotech lab.

Yes, that's exactly.

Can you tell our viewers who are looking at it right now what exactly this facility does?

Sure.

This facility, we use it for research in advanced electronics, in developing devices for if say, lab on a chip, medicals testing as well as for micro electromechanical systems.

But it's really for advanced prototyping and research.

We also use it.

Some companies use it for developing their prototypes and commercialization efforts.

Before we went on air, I asked you, you said you're a professor of electrical engineering.

And I said, well, is that is that about all about nanotechnology and microchips?

And you said, well, pretty much every electronic nowadays is based on nanotechnology.

That is the case.

Everything is truly in the electronics world getting smaller.

That's absolutely the case.

Nanotechnology underpins all of electronics these days.

Other the convenience of carrying mobility.

What is the benefit of shrinking something?

Yeah.

So the efficiency improves.

So, for example, in a mobile device, that means how much computation you can do or how long it will function on a given battery life.

It also improves the frequency response, which opens up higher frequencies for communications as as well as making it overall more power efficient and more capable.

Yeah.

Our shows about the region's economy here in Michiana.

But this lab actually is, as we talked about, one of the most impressive and modern labs in any any educational environment around the country.

You're focused on these nanotechnologies.

How how is it that that helps students, first off?

But then how does it make that transition in the commercial world?

Sure.

So with regard to students, we use this to teach courses.

Our students who come through this will have made test circuits as well as actually they make an integrated circuit that can play the fight song in a very Notre Dame sort of thing.

But our more advanced students do research.

They develop new transistor technologies, new electronic devices that have never been made anywhere else before.

And we build them here, test them, and really validate how well they work and how they compare to the state of the art.

That all helps to develop a workforce, and then they go off to work at places like Intel and Micron and other advanced semiconductor houses.

Yeah.

And in addition to training students, teaching students, you also have that relationship with private users that come for this facility.

Yes, that's right.

There's been a number of companies that have used our facility to either develop their prototypes and then they've gone off and commercialized it, or they use us as sort of an advanced R&D arm where they can can come in and prototype a few things, see how well it works, and really use us as a as a as a way of getting ahead of their R&D curve.

Right.

You know, before we went on air, I was thinking about what a major role universities across the country have played in engineering advancements from the atom bomb.

I see there on your board that one of the first wireless messages was actually sent from Notre Dame to Saint Mary's.

Yes.

And today, wireless messaging is a massive part of our world.

What is it about the educational institution that makes it conducive to this type of research?

We have faculty with with interest specializations that cover the span from from people who are like me, semiconductor people, very low level in terms of their interest in semiconductors and in transistors, all the way up to people who think about protocols and big, big systems, sorts of issues and so by integrating over this really large span from semiconductor devices all the way through systems, we have people we can interact with and understand how the technologies will all fit together to make a complicated system like a wireless communication system.

You know, that's awesome.

Before we went on air, you told me a little bit about your work here on the 5G cellular network, the 6G network that we've all maybe heard a little bit about but aren't sure what is the engineering.

Milestone?

What is it that you think really?

Is that next advancement?

Is it continuing to make things smaller or is it more about being efficient with the energy it takes to make the device work?

Yes.

So there's all of the above.

But but but of course, power efficiency is very important.

And performance is very important.

And what we see now is that silicon is becoming difficult to scale any further.

And so what we're doing is we're looking at additional materials that can provide performance beyond what's possible with silicon.

In particular, I'm working on gallium nitride that is especially power efficient and especially high performance in high frequency applications.

So this is exactly what 6G needs in order to really work the way we really all want it to.

Yeah.

Yeah.

Well, that's such an interesting part of the engineering challenge that we lived through on a day to day basis.

And there are somewhat miraculous these devices that we have in our hands and the power that we wield, even looking back only 20, 30 years ago.

Thank you for being with us today, Professor.

I appreciate the tour.

I appreciate your time.

I know you're busy, but really, it's been a great day.

Jeff, back to you in the studio where I'm sure you've got a lot more to talk about, not only about microchips and the economics of it, but also just about where our economy is going as it becomes smaller and more digital.

George, thanks.

Appreciate the inside look at what's going on out there on campus.

We're back with Derek Lake, the associate director of ND Nanoscience, Science and Technology.

Derek, thanks for continue.

Our conversation with me and our audience I think are learning a lot already.

So so we're continuing this conversation about chips.

We talk briefly about production of chips, the shortage of it.

We talked a little bit about how much of it's produced outside the US.

The United States, though, is making a big push to bring some of that production back to the US.

Can you talk a little bit about what the what the U.S. is doing to try to help produce more chips here?

Yeah.

So so currently the US still is top in designing chips.

So from the technology standpoint, as I mentioned, it's only about 10% of the global manufacturing capacity.

So the companies are looking to bring back that manufacturing capacity to the US and for for a few reasons.

One of course is about kind of the commercial supply security.

You know, we, we experienced that with the pandemic.

And so being able to differentiate with the suppliers are and then you have also some of the issues with geopolitical issues, issues with being in in East Asia and potential issues there.

A pandemic occurs again and could shut things down.

So then you have problems.

And it's also important from a security national security issue, making sure that we can produce the chips that we need to go into the national security, whether it's in missiles or defense radar, whatever it may be, but then also be able to trust those electronics that go in there.

So are we able to get get those from, you know, from trusted sources?

And so companies are already looking at where they can bring manufacturing back.

So whether it's expanding current facilities or also building new, new ones here in the US.

Great.

So yeah, so they're getting lots of attention.

I think people are anxious for them.

It's very high tech manufacturing.

So so Indiana also has this on their radar.

I don't know where chips are.

Also get it for produce Indiana feels like they want to play in this space.

Could you talk a little bit about just sort of the the state in the state's approach or some of the things that the state is trying to do?

Yeah.

So a couple of things to mention there is so we Intel has already made the announcement in Ohio that they're going to put a chip foundry there and then and that'll be a large one.

And they're estimating there's going to be around a workforce of 3000 people once that gets up and running.

And then there will be and then a smaller company.

But but still a sizable one is Sky Water Technology who's talked about putting the foundry in the state as well.

And they're they're smaller and a little bit different type of manufacturer than Intel.

So they're there to look in there.

But the state has formed a task force.

The IEDC has put a task force together that is looking at ways to attract companies to the state, looking at what we what the state can do overall.

And that includes members of academia, industry and other kind of think tanks within the state to help help attract those.

And so they're looking at that.

And then also from a academic standpoint, we are working together between universities on how we can collaborate on research in this area.

It sounds good.

So let's talk a little bit more because you touched the beginning on ND Nanoscience and Technology and kind of your role there.

Sort of what's happening in semiconductor kind of falls into your space.

Talk about some things Notre Dame maybe is doing to to try to position themselves in this space as well.

Yeah.

So we have a long history of working in semiconductor is for example, we have, we've had for the past 15 years centers which, which bring together universities from across the US that have been funded by the Semiconductor Research Corporation and in particular the ones that we've had here at the university have been around devices.

And so looking for example, how do we continue to to reduce the power and operate these these computers so these chips and semiconductors that reduce power or how do we integrate more features into these devices and semiconductors.

And and then also, we've got research around the next generation of communications, which are going to be a very important with semiconductors.

I mean, that that's going to play a role as we advance go go to 6G and other advanced wireless communication.

And we've got research going on in that area.

And then just I think you're something we were talking about before as having these facilities and having the expertize on campus that we can continue to grow in this area.

So looking at new types of semiconductors, looking at how we can continue to to shrink that down and continue to to essentially build on Moore's Law from that way.

Right.

You know, it's interesting to think about the today's semi conductor is really different than probably one from a year ago or five years ago or ten years ago.

And the technology's evolving.

So it's been interesting to hear more and more so talk for a second about just the the maybe the student like is this the engineering students or science or whatever.

Talk to us a little bit about the obviously, the the professors.

You know, I think kind of on the research side of it, the student opportunity to just tell us tell us who's interested in this space.

That's a really good question, because this this is going to be vital to bringing the semiconductor industry back to the US and growing it.

So it's really not bringing it back, but really looking at how to grow it.

And so we're going to need a lot of workers in this area.

And so the semiconductor association has estimated they're going to need this 50 billion, which is in the CHIPS Act, is invested around 42,000 workers over the next five years in this area.

And that could lead to another 280,000 jobs even related to this industry, is what they're estimating.

So these are these are engineers in electrical engineering, computer science, engineering, even chemical engineering.

But I would say not only is it, but it's at all levels.

So we're talking, you know, could be associates degrees, bachelor's degrees, master's, Ph.D. or certificate.

So there's going to be a wide range of new employees needed and training and just a lot of opportunity for employees to come into into this space.

Yeah, I know.

It's interesting because especially young people I think are thinking about these new opportunities.

Obviously, communities, when they hear about those job opportunities, these are pretty good jobs for a community if they can attract.

I know the Ohio Project garnered a lot of interest from different states in terms of trying to attract that.

So yeah.

And what you one of the things they mentioned Intel mentioned there is is they they put it there because they have access to not only talent in Ohio, but a talent in the in the region, which includes Indiana.

Yeah, sure.

So so talk a little bit.

You mentioned in this space that the university works with other universities too.

So obviously you're there's a I don't know is a co-op petition here they're all that you're competing on some levels with them you're cooperating and others talk about just Notre Dame and how they team up or work with other institutions on things like this or other industries.

Yeah.

So we, we work together to kind of build on the strengths between universities and to come up with something larger in a larger center or a larger type of research effort.

And so this can be in from a technical standpoint, as you mention, trying to develop the next generation or advance semiconductor research.

It can also be down around workforce development.

So looking at how to change and improve curricula in here so that as we're growing the next force with the next generation workforce and people at transition and making sure they have the right education and classes in there.

And so it's both those levels.

So that include universities within Indiana like Purdue, but also and we have research centers at the university where we're working across the country with with multiple institutions.

And at the same time, are you working with private sector as well, too?

I mean, is there a little bit of are the chip makers doing a little bit and the university is doing a little bit?

Are they doing that together or sort of separate or.

Yeah, so so there is there's research that the that that's funded by industry there at the university and then also other collaborations to help get students, for example, into internships and and get them into the industry as well.

So how about it?

Let's talk in our last couple, 2 minutes or so about the the student interest.

So obviously it is as we're watching all of this technology is growing.

There seems to be a greater need for all of those in those different studies that you talked about, whether it's computers or engineering or different things.

What what's the interest level?

I mean, are is this something that that there's great interest in this?

And does this help Notre Dame attract students here because of the research that's happening there?

Yeah.

So I think one of the important things to think about here is, is that this is going to require probably a larger effort to educate students, you know, even down into high school and grade school, about, for example, what a semiconductor is.

Why is it important to the economy?

Why is it important to me on an everyday level and then help them understand how the science they're learning and eventually, you know, physics and math and things that they're learning can apply to this.

So so this is it's important to continue to grow this.

You know, it's exciting.

For example, talking about the CHIPS Act, this is like a once in a generation type of investment.

And so it is exciting these opportunities that are going to be coming for students and workforce.

Yeah.

And you mentioned just back to chips real quick.

Oh, 50 billion, is that the number the federal government is talking about investing?

And that's right.

So so those that's going to be funds that they'll make available to help spur the construction of the new fabs and the expansion of facilities.

And then they're also making around 24 billion in tax credits available as well.

Great.

Good.

Well, he's Derek Lake.

He's the associate director of ND Nanoscience and Technology.

Derek, thank you so much for the conversation.

They really appreciate the insight and helping us learn a little bit more, appreciate the work you're doing on campus, and we'll look forward to having you back for some additional conversation.

Thanks, Jeff.

Glad to be here.

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