[Chip Talk] The Person Who Shifted the Semiconductor Manufacturing Supply Chain from the US to Asia

Engineer and Executive Charles Spock Dies at 96
US Now Pursuing Manufacturing Supply Chain Self-Reliance
"Survival of the US Through Offshoring... Creation of High-Wage Jobs"

While the U.S. government is making every effort to relocate the semiconductor manufacturing supply chain, which is centered in Asia, back to the United States, over 60 years ago in the 1960s, the U.S. was actually focused on moving semiconductor manufacturing facilities to Asia. The person who led and succeeded in this effort was Charles Sporck, a prominent American engineer and businessman who ran a semiconductor company. Known as a "pioneer of the semiconductor industry," he passed away last month at the age of 96.

American engineer and entrepreneur Charles Spork

The Wall Street Journal (WSJ) recently published an article reflecting on Sporck's life, highlighting his significant role in the process of relocating semiconductor manufacturing facilities from the U.S. to Asia. WSJ described him as "a proponent of globalization before globalization became a political issue," stating, "He argued that offshoring production bases overseas, citing reasons such as cheap labor and raw material procurement, would create more high-wage jobs in the U.S. semiconductor industry."

Born in 1927, he majored in mechanical engineering at Cornell University and began his career at General Electric (GE) in 1950. Sporck showed interest in relocating manufacturing processes overseas even at this early stage. His superior was seeking ways to improve factory efficiency, and the solution proposed was moving operations abroad. The idea was that Asian countries, with their low labor costs and faster manufacturing speeds, would be more effective than producing in the U.S. However, his idea faced fierce opposition from labor unions, and management eventually abandoned the plan.

Later, Sporck joined Fairchild in 1959, which was later acquired by the U.S. semiconductor company On Semiconductor. Around this time, Robert Noyce, one of Fairchild's founders, invested in a transistor radio factory in Hong Kong and instructed Sporck to consider establishing manufacturing facilities there.

Visiting Hong Kong, then a British colony, Sporck judged that it was possible to build a system capable of faster product manufacturing even while reducing wages to one-tenth of U.S. levels. In 1963, he established a factory in Hong Kong. Subsequently, Sporck added a factory in Singapore, arranging for semiconductor design to be conducted in the U.S. while assembly and testing took place in Asia.

In 1967, Sporck moved to become the CEO of National Semiconductor, a small semiconductor company facing management difficulties. As the importance of semiconductors grew in the 1970s, the company expanded its sales force and established factories in Scotland and Southeast Asia. However, in the 1980s, competition with Japan intensified, causing memory semiconductor prices to plummet and the company to suffer significant losses. Around this time, Sporck believed that subsidies were necessary to win the fierce competition in the semiconductor market and successfully persuaded the U.S. government to provide them.

He retired as CEO in 1991 at the age of 63. When he first took office as National Semiconductor's CEO in 1967, the company's annual sales were $7 million (approximately 984 million KRW), but by the time he retired, sales had grown significantly to $1.7 billion. This is regarded as one of the greatest success stories in the U.S. semiconductor industry. National Semiconductor was acquired by Texas Instruments in 2011 for $6.5 billion.

Chang Zhongmou, founder of Taiwan's TSMC, the world's No. 1 foundry (semiconductor contract manufacturing) company, is speaking at the groundbreaking ceremony of the Phoenix plant in the United States in December 2022. Photo by AP Yonhap News

The New York Times (NYT), in an article announcing Sporck's retirement, described him as a "pioneer of the semiconductor industry," stating that his career "marked both the great victories and recent challenges of the U.S. semiconductor industry." In 1996, the Semiconductor Industry Association (SIA) awarded Sporck a lifetime achievement award.

Meanwhile, amid fierce competition for semiconductor supremacy triggered by the COVID-19 pandemic, the U.S. is currently making every effort to expand semiconductor manufacturing facilities. Based on the Semiconductor Incentive Act, which provides large subsidies to global semiconductor companies, the U.S. aims to increase the self-sufficiency of its semiconductor supply chain. According to a semiconductor supply chain analysis report released by the SIA in May this year, the U.S. accounted for 10% of total semiconductor manufacturing in 2022, while Asia (South Korea, China, Japan, Taiwan) accounted for 76%. The U.S. aims to secure manufacturing facilities domestically and increase its share to 14% by 2032. If successful, Asia's manufacturing share could decrease to around 72%.

Some critics argue that although the U.S. was once a semiconductor powerhouse, it diversified its supply chain outside the country, ultimately losing semiconductor leadership to Asia.

Sporck also faced criticism at the time he promoted overseas factory relocation, with claims that "the end of American home appliance manufacturing had begun." However, he later countered that relocating manufacturing processes overseas allowed the U.S. semiconductor industry to survive and created more high-income engineering jobs. Chris Miller, a professor at Tufts University and author of the global bestseller "Chip War," which highlights the global semiconductor supremacy battle, evaluated, "The semiconductor industry achieved globalization by building the Asia-centered supply chain we see today at a time when no one had even heard the word globalization."