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Grassley letter sheds light on microelectronics

Federal project chugs forward with action behind the scenes

July 9, 2020
By Amy H. Peterson - Staff Writer , Estherville News

This week, a letter from U.S. Senator Chuck Grassley to three members of the Committee on Appropriations dated Dec. 5, 2019 was released. Grassley said, "I urge you to continue to support funding for Department of Defense microelectronics technology development and support, and to consider the role of small business in creating a secure supply chain for these technologies."

The 2020-2021 federal defense budget includes $106.6 billion, the most ever for Research, Development, Technology & Electronics (RDT&E) in its history. The share appropriated for microelectronics and implementing 5G networks is $1.5 billion. The DoD stated, "[the budget] is focused on the development of crucial technologies."

Microelectronics is the manufacture of very small electronic designs and components, often made from semi-conductor materials. Think transistors, inductors, resistors, diodes, insulators and conductors.

The Pentagon's director of defense research and engineering for modernization said in a May, 2020 report that microelectronics are in nearly everything, including the complex weapons systems the Defense Department buys, such as the F-35 joint strike fighter. They are also found in GPS systems, radar, communications systems, microcomputers and other devices.

"It is so ubiquitous and because it is ... so fundamental to everything we do," Mark J. Lewis said in a forum sponsored by the Armed Forces Communications and Electronics Association.

After some incidents of insider threats and possible security breaches, the Department of Defense (DoD) in 2020 has adopted a "zero trust" approach to microelectronics, assuming that no device is safe until it has been subjected to high-level testing, scrutiny and security measures. This created a need for microelectronic manufacturing facilities in Iowa and across the nation, because there is currently no multinational firm that manufacture leading-edge devices that have achieved trusted supplier status.

Fact Box

Estherville native Jeff Robinson, a finance professional now based in the Twin Cities, has been working on what's known as the federal project since 2018. The plan is for a 75,000 sq. ft. manufacturing facility in Estherville that would bring current federal employees to the area and employ about 47 local individuals at average wages of $60,000 per year with federal benefits.

This is where small businesses come in to the supply chain.

"As the DoD continues to develop a strategy for ensuring a secure, trusted supply chain for microelectronics, it is important to consider utilizing small businesses," Senator Grassley said in his letter.

In the entire process, an alphabet soup of organization acronyms becomes important. A March, 2020 audit found that the DoD's internal manufacturing units were struggling somewhat between meeting the needs of a small-batch, specialized microelectronic component selection, delivering supplies timely, and ensuring national security.

The Defense Microelectronics Activity (DMEA) oversees the manufacture of microelectronics.

The DMEA was established in 1997 to be the DoD center for microelectronics technology, acquisition, transformation, and support. The DMEA provides microelectronics components, assemblies, and expertise in support of DoD systems. The Director of Defense Research and Engineering for Research and Technology oversees all DoD research and technology investments, including the DMEA.

The federal project is one way the DoD is solving a long-term issue of managing supply-chain globalization, manufacturing costs, and other uncertainties.

"Going into our third year, we're finding that it's not a sprint or a marathon, but something even longer," Robinson said.

Robinson said the difficult work of the federal project has allowed him to connect to people who have helped with other projects.

The Government Accountability Office (GAO) found in April 2015, that "DoD took some efforts to address access to trusted microelectronics. For example, to address risk related to foreign sources, DoD initiated its Trusted Foundry Program (later renamed "trusted supplier program") in 2004 through an annual contract with the IBM Corporation to provide government-wide access to leading-edge microelectronics in a trusted environment. Trust is established by assessing the integrity of the people and processes used to design, generate, manufacture, and distribute national security critical microelectronics. As part of its Trusted Defense Systems Strategy, DoD expanded, through an accreditation process which includes obtaining facility and personnel security clearances, the number of trusted suppliers-which totaled 64 as of August 2014. However, none, other than IBM, offered leading-edge technologies that met DOD's needs. In October 2014, IBM, which had been DOD's sole-source supplier for leading-edge technologies for over a decade, announced the planned transfer of its microelectronics fabrication business to GlobalFoundries-a U.S.-based, foreign-owned entity; and in July 2015, the transfer was completed. As a result, continued access by DOD to the leading-edge technologies formerly provided by IBM is uncertain. By not addressing alternative options when the Defense Science Board first raised them as urgent issues and by relying on a sole source supplier for leading-edge microelectronics, DOD now faces some difficult decisions with potentially significant cost and schedule impacts to programs that rely on these technologies, as well as national security implications."

It was this supply-chain issue that led to the federal government's transition to zero-trust manufacturing and the idea that one facility or company couldn't provide for all the defense microelectronic needs, but a vetted, security-cleared, wider supply chain would prevent the problems of depending too much on one or two sources.

Robinson said he was especially grateful to Rick Olesen, CEO of Iowa Lakes Electric Coop, whose relationship with Sen. Grassley made the letter possible, and to Lyle Hevern, whom Robinson said played quarterback for the project, facilitating talks with other economic development professionals around the state.

The recruitment of business to Estherville is not over, Robinson said. With Hevern, Robinson said he has had businesses in Minneapolis burned down in the June riots after the death of George Floyd to listen regarding relocation to Estherville, with a group of investors offering one of them a reported $50 million to relocate. "It's just the beginning," Robinson said.



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