Vertical integration has become inefficient, dragging creative companies down with costs associated with maintaining manufacturing facilities. “The seams between each stage of development; between design and prototyping, early production runs, limited, and large scale manufacturing … create extensive rework and are the source of production delays, surprises, and cost overruns,” Dugan said in her statements to PCAST.
The semiconductor industry, on the other hand, designs products and relies on semiconductor foundries to manufacture — even to prototype at the prototype stage — their products. These fabrication-less firms focus on innovating and leave the core manufacturing to the foundries, which distribute their costs across the products of many companies. The result is greater efficiency on both ends; designers focus on innovating and manufacturers are never idle waiting on the next big idea from upstairs.
The Defense Advanced Research Projects Agency (DARPA) is embarking on a five-year, $1-billion effort with no less ambitious a goal than reversing the decades-long decline of US manufacturing.
Regina Dugan says to do so, DARPA will attempt to replicate the successful model of the US semiconductor manufacturing sector in other industries, ranging from pharmaceuticals to micromechanical devices to gradient-index optics.
“DARPA wants to do for US manufacturing what it did for the communications and IT industries with the Internet,” Dugan told the President’s Council of Advisors on Science and Technology (PCAST) on 7 January. The key, as she described it, will be transferring the semiconductor manufacturing paradigm, in which product design companies outsource the manufacturing of their products to so-called foundries, which don’t make products of their own. That model has created a more efficient manufacturing process, compared to the vertically integrated model typically found among US manufacturers, in which the foundries are able to distribute their costs over thousands of semiconductor products, while so-called fab-less design firms can use the nimble and flexible foundries for their fabrication needs, from prototypes through high volume production.
Adoption of that model led to “a period of explosive growth” in the semiconductor design business, Dugan told the PCAST. “When the means by which we produced became rapid, cost-effective and seamless in the semiconductor industry, hundreds of designers became tens of thousands of designers,” she said. Among those fab-less design firms is Akustica, which was founded by former DARPA program manager Kaigham Gabriel to design microelectromechanical (MEMS) devices used in consumer electronics. Dugan, who also did a stint as a DARPA program manager before founding an explosives detection business, said that she and Gabriel, who is now the agency’s deputy director, “both know on a visceral basis how difficult it is to make new products.” The two, she said, have concluded that the fundamental technical challenge confronting US manufacturers of all types is “the seams between each stage of development; between design and prototyping, early production runs, limited, and large-scale manufacturing.” Those seams, she continued, “create extensive rework and are the source of production delays, surprises, and cost overruns.”
The agency is currently working to “integrate and synthesize the structure of” the more than 20 existing programs that are manufacturing related. Funding for those programs currently totals about $200 million annually.
One PCAST member, Richard Levin, president of Yale University, challenged Dugan’s vision, asserting that decoupling the product design process from the manufacturing process would provide a greater incentive for US nondefense companies to move their manufacturing operations abroad, where labor costs are lower. While acknowledging that process could occur, Gabriel told the committee that growth would occur in product design, where entry costs would be slashed. “When you lower the barrier for people to prototype, and for people to become part of the manufacturing and design process, you go from tens or hundreds of people to tens of thousands of people who can take part,” he said.