Jim Will
As the U.S. races to unearth domestic supplies of minerals critical for its defense systems, it’s equally urgent to transform those minerals into capability through the development of a comprehensive national strategy to boost domestic electronics manufacturing.
Electronics are the endgame, and scaling up mineral capacity without doing the same for electronics will lead to failure.
Critical minerals, which include rare earth minerals, are vital to electronics production because of their unique magnetic, electrical and luminescent properties. While the U.S. developed much of the modern science to extract and purify these minerals, refining and processing capacity has migrated overseas.
China now dominates nearly all stages of critical mineral production, giving the country unchecked control on supply and pricing. Even if the U.S. is successful with its current efforts to secure non-Chinese mineral supply chains, the materials still need to be sent to China for processing.
China also dominates the electronics ecosystem, leading a handful of Asian countries that collectively are responsible for approximately 75% of worldwide production. More than 40% of the semiconductor components that sustain U.S. weapons systems and associated infrastructure are now sourced from China alone. For some electronics, it’s nearly domination. China is the predominant supplier of liquid crystal displays (LCDs), upon which more than 90% of U.S. military systems rely.
U.S. capability is eroding
While China presses forward with its national strategy to dominate critical minerals and the electronics that underpin defense and commercial systems, the U.S. continues to see its electronics manufacturing capability and capacity erode to critical levels.
There is no large-scale domestic production of ultra-high-density interconnect (UHDI) printed circuit boards (PCBs), which are used in defense applications to meet the critical need for smaller, lighter and more powerful electronic systems. Advanced packaging capacity is limited, and U.S. chip manufacturing accounts for only 12% of global output.
This domestic deficit, combined with Asian-centric production of critical minerals and electronics, puts the U.S. at significant risk militarily and economically. With U.S. officials warning that China aims to be ready to take Taiwan by 2027, an Indo-Pacific conflict would jam supply lines and contested logistics could make resupply from Asia difficult, if not impossible.
Electronics power every weapon system, aircraft, ship and communications platform, and they enable the tools used to manufacture these critical defense systems. The war in Ukraine is a canary in the coal mine, showing the massive electronics requirements needed to maintain battle readiness.
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