Current news coverage may have you believe that when it comes to critical minerals, all we’re talking about is Rare Earths and battery tech metals, such as Lithium, Cobalt, Manganese, Nickel and Graphite. However, while certainly extremely important for 21st Century technology, these materials and the sectors in which they find key applications only represent the tip of the proverbial iceberg when it comes to securing critical mineral supply chains.
In its 100 Day Supply Chain Report, the Biden Administration dedicated an entire chapter to the supply chains of semiconductors — for good reason.
Semiconductors have become indispensable components for a broad range of electronic devices, and their importance cannot be overstated. The Department of Commerce-led chapter in the report cites the transformational impact of the colloquial computer chip as the launching point of its review:
“Semiconductors are the material basis for integrated circuits that are essential to modern day life and are used by the typical consumer on a daily, if not hourly, basis. The semiconductor-based integrated circuit is the ‘DNA’ of technology and has transformed essentially all segments of the economy, from agriculture and transportation to healthcare, telecommunications, and the Internet.
In addition to the central role they play in the U.S. economy, semiconductors are essential to national security. Semiconductors enable the development and fielding of advanced weapons systems and control the operation of the nation’s critical infrastructure. They are fundamental to the operation of virtually every military system, including communications and navigations systems and complex weapons systems such as those found in the F-35 Joint Strike Fighter. They are key to the ‘must-win’ technologies of the future, including artificial intelligence and 5G, which will be essential to achieving the goal of a ‘dynamic, inclusive and innovative national economy’ identified as a critical American advantage in the March 2021 Interim National Security Strategic Guidance.”
According to the report, the supply chains for these highly specialized hi-tech components are extremely complex, as the manufacturing of semiconductors “requires hundreds of essential inputs, many of which are raw materials, chemicals, and gases. These materials have their own complex supply chains, and likely contain hidden choke points that could disrupt production.”
The manufacturing of semiconductors begins with polysilicon, for which the U.S. currently has some production capacity. However, according to the Department of Commerce, “U.S. technological leadership and production of semiconductor-grade polysilicon is at risk due to China’s actions to increase its dominance of both the semiconductor and solar supply chains.” That risk is further heightened now that China is under U.S. import sanctions for producing polysilicon using forced labor in the Province of Xinjiang. U.S. companies importing Chinese products containing polysilicon from Xinjiang risk having those products impounded at American ports by U.S. Customs and Border Protection.
Two other key semiconductor materials are Gallium and Indium — for both of which the United States is 100% import reliant, both of which made the 2018 official U.S. Critical Minerals List released by the Department of the Interior, and both of which are primarily sourced from China.
Due to the extremely complex and geographically dispersed nature of the semiconductor supply chain (which results in the typical semiconductor production process spanning multiple countries and products crossing international borders up to 70 times according to the Department of Commerce), there are many access points for supply chain vulnerabilities along the way.
To address the semiconductor supply chain challenge, the Biden Administration seeks to “bolster its partnership with the private sector in domestic semiconductor manufacturing and R&D,” and “strengthen engagement with allies and partners to promote fair semiconductor chip allocations, increase production, and promote increased investment.”
However, let’s be clear: As ARPN’s Daniel McGroarty pointed out last year against the backdrop of excitement over the recent announcement of Arizona as the site for Taiwan Semiconductor’s new next-gen semiconductor factory to manufacture their new 5-nanometer (5nm) chips: “the first word in supply chain is ‘supply.’”
As the Biden Administration begins to tackle the complex semiconductor supply chain challenge in the context of its “all of the above” approach to decouple from adversary nations, it must begin at the beginning.
Thankfully, the U.S. is not only in the fortunate position to have known resources for both Gallium and Indium (in Texas and Alaska, respectively), both metals can also be “unlocked” in the “co-product” development of their Gateway Metals Aluminum (for Gallium) and Zinc and Tin (Indium) — another reason stakeholders should focus more on the inter-relationship between Gateway Metals and the critical co-products they unlock.