Semiconductors, or microchips, are critical to almost everything electronic used in the modern world. In 1990, the United States produced about 40% of the world’s semiconductors. As manufacturing migrated to Asia, U.S. production fell to about 12%.

“During COVID, we got a wake-up call. It was like [a] Sputnik moment,” explained Mark Lundstrom, an engineer who has worked with microchips much of his life.

The 2020 global coronavirus pandemic slowed production in Asia, creating a ripple through the global supply chain and leading to shortages of everything from phones to vehicles. Lundstrom said increasing U.S. reliance on foreign chip manufacturers exposed a major weakness.

“We know that AI is going to transform society in the next several years, it requires extremely powerful chips. The most powerful leading-edge chips.”

Today, Lundstrom is the acting dean of engineering at Purdue University in Lafayette, Indiana, a leader in cutting-edge semiconductor development, which has new importance amid the emerging field of artificial intelligence.

“If we fall behind in AI, the consequences are enormous for the defense of our country, for our economic future,” Lundstrom told VOA.

Amid the buzz of activity in a laboratory on Purdue’s campus, visitors can get a vision of what the future might look like in microchip technology.

“The key metrics of the performance of the chips actually are the size of the transistors, the devices, which is the building block of the computer chips,” said Zhihong Chen, director of Purdue’s Birck Nanotechnology Center, where engineers work around the clock to push microchip technology into the future.

“We are talking about a few atoms in each silicon transistor these days. And this is what this whole facility is about,” Chen said. “We are trying to make the next generation transistors better devices than current technologies. More powerful and more energy-efficient computer chips of the future.”

Not just RVs anymore

Because of Purdue’s efforts, along with those on other university campuses in the state, Indiana believes it’s an attractive location for manufacturers looking to build new microchip facilities.

“Purdue University alone, a top four-ranked engineering school, offers more engineers every year than the next top three,” said Eric Holcomb, Indiana’s Republican governor. “When you have access to that kind of talent, when you have access to the cost of doing business in the state of Indiana, that’s why people are increasingly saying, Indiana.”

Holcomb is in the final year of his eight-year tenure in the state’s top position. He wants to transform Indiana beyond the recreational vehicle, or “RV capital” of the country.

“We produce about plus-80% of all the RV production in North America in one state,” he told VOA. “We are not just living up to our reputation as being the number one manufacturing state per capita in America, but we are increasingly embracing the future of mobility in America.”

Holcomb is spearheading an effort to make Indiana the next great technology center as the U.S. ramps up investment in domestic microchip development and manufacturing. “If we want to compete globally, we have to get smarter and healthier and more equipped, and we have to continue to invest in our quality of place,” Holcomb told VOA in an interview.

His vision is shared by other lawmakers, including U.S. Senator Todd Young of Indiana, who co-sponsored the bipartisan CHIPS and Science Act, which commits more than $50 billion in federal funding for domestic microchip development.

‘We are committed’

Indiana is now home to one of 31 designated U.S. technology and innovation hubs, helping it qualify for hundreds of millions of dollars in grants designed to attract technology-driven businesses.

“The signal that it sends to the rest of the world [is] that we are in it, we are committed, and we are focused,” said Holcomb. “We understand that economic development, economic security and national security complement one another.”

Indiana’s efforts are paying off.

In April, South Korean microchip manufacturer SK Hynix announced it was planning to build a $4 billion facility near Purdue University that would produce next-generation, high-bandwidth memory, or HBM chips, critical for artificial intelligence applications.

The facility, slated to start operating in 2028, could create more than 1,000 new jobs. While U.S. chip manufacturer SkyWater also plans to invest nearly $2 billion in Indiana’s new LEAP Innovation District near Purdue, the state recently lost bidding to host chipmaker Intel, which selected Ohio for two new factories.

“Companies tend to like to go to locations where there is already that infrastructure, where that supply chain is in place,” Purdue’s Lundstrom said. “That’s a challenge for us, because this is a new industry for us. So, we have a chicken-and- egg problem that we have to address, and we are beginning to address that.”

Lundstrom said the CHIPS and Science Act and the federal money that comes with it are helping Indiana ramp up to compete with other U.S. locations already known for microchip development, such as Silicon Valley in California and Arizona.

What could help Indiana gain an edge is its natural resources — plenty of land and water, and regular weather patterns, all crucial for the sensitive processes needed to manufacture microchips at large manufacturing centers.