Semiconductor fabrication in the United States has been on the wane for years. This resulted in the current microchip shortage. Nonetheless, as legislation is being debated to add incentives for semiconductor manufacturing in the United States, several companies have already begun to increase their efforts. Intel recently announced in March that it would build two chip plants in Arizona, and TSMC (Taiwan Semiconductor Manufacturing Company) also announced it is opening a plant there as well. Reportedly totalling USD $32 Billion, these projects are at least in part an attempt to address the ever growing chip shortage that is affecting many industries.
For example, the chip shortages recently hit automotive manufacturing hard. As car dealerships run out of inventory, many vehicles are stuck at the assembly lines, virtually completed and simply awaiting a chip or two. It seems that the perfect storm of a long pandemic, a brief recession, and an unanticipated increase in demand for chips in personal devices spurred by a remote-based work environment all contributed to the chip shortage in many industries, including automotive manufacturing.
But there is another storm sweeping over semiconductors in the United States. Just as companies begin efforts to address the chip shortages, patent litigation related to semiconductors is on the rise. In particular, non-practicing entities (NPEs) are bringing a major portion of semiconductor patent litigation, fueled largely by an influx of litigation financing into the once-aloof area. Indeed, while overall litigation is expected to see a slight drop (mostly attributed to operating companies focusing on recovery rather than rapacity), with a 42% decrease from 2019 to 2020, semiconductor litigation has risen steadily for the past three years, and could overtake last year’s all-time high if the threatened clouds break.
