Protect US Silicon for Silicon Valley and Beyond
There’s a good reason that America’s technology hub in California is nicknamed Silicon Valley. Silicon is indispensable to modern life and the American economy. Silicon alloy, a byproduct of silicon, is a crucial raw material in, among other things, microelectronics, computer chips, automotive parts, building materials, and chemicals. That makes it integral to housing, transportation, consumer electronics, defense production, space exploration, and renewable energy.
The European Union recognized the importance of silicon alloy to the European economy when it added silicon metal to its list of critical raw materials in 2014. The designation was an important step toward ensuring reliable and unhindered access to this vital product. The E.U. then went a step further by supporting local production of silicon metal and protecting European producers from unfair foreign competition to strengthen domestic sources.
In 2018, the U.S. Department of Interior published its own list of critical minerals comprised of 35 mineral commodities considered important to the economic and national security of the U.S. Unfortunately, this list does not include or recognize the importance to the U.S. economy of certain elements — like silicon-based alloys — that must be produced instead of extracted directly from the ground. This is shortsighted.
U.S. dependence on foreign sources of silicon metal is a strategic vulnerability for the U.S. China is responsible for at least 66 percent of total global silicon metal production. If projections prove accurate, China will remain the biggest producer of silicon metal well into the future, because of its importance to the production of semiconductors and other critical components. Considering silicon’s significance in a growing number of electronic devices, the U.S. must do more to protect and nurture domestic silicon metal production.
There are indications that the federal government is interested in moving in this direction. President Biden has expressed grave concern about threats to the U.S. supply chain for all manner of important products. On February 24th, President Biden signed an Executive Order that directs federal agencies to secure and strengthen America’s supply chains. The silicon metal supply chain should be among those that the government protects.
The first step in protecting American silicon metal production and supply is simple and straightforward. The government should expand its critical minerals list or create a critical raw materials list similar to the E.U.’s and include silicon metal on that list. The listing should be augmented by government incentives that will aid production and investment in research and development. The combination would open the way to increased domestic exploration, production, recycling, and reprocessing — all significant advancements.
America’s silicon metal production capacity needs to be nurtured in this way. The U.S. is 57 percent reliant on silicon metal imports from abroad. Without this alloy, we cannot produce such critical items as semiconductors in the U.S. As events over the last year have shown, global supply chains can be disrupted by pandemics and blocked channels. Silicon metal is used in the production of polysilicon, which goes into silicon wafers, and then into computer chips. There is limited chip manufacturing in the U.S. Silicon wafer production is almost nonexistent. If the U.S. only invests in chip production, but continues to rely upon Asia for the supply chain inputs, such as silicon metal and silicon wafers, we still have a supply chain problem.
President Biden’s January 25th “Made in America” Executive Order made clear the importance of procuring goods manufactured in the U.S. whenever possible. Silicon metal should be a special priority. In particular, the buy American mandate should apply to U.S. military hardware. Few strategic decisions would make better sense.
To reduce our dependence on foreign producers of silicon metal, the U.S. also should fund research and development of silicon metal processing to foster a healthy U.S. silicon wafer and computer chip industry. Federal funding would accelerate the ability of U.S.-based companies to not only process silicon metal for use in the U.S., but would do so in ways that are more environmentally friendly than in other major silicon metal-producing countries like Brazil, China, and Russia.
By including silicon metal on the list of critical materials and providing government aid and research funding, the U.S. can boost domestic production of silicon alloys and protect essential supply lines. The time for action is now or else we might soon have to find another nickname for Silicon Valley.
Bill Hightower is president of Tower Strategies, Inc.
