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Audit of DoD Hotline Allegations Concerning the Defense Microelectronics Activity (DODIG-2020-072)

Audit

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Publicly Released: March 26, 2020

Objective

We conducted this audit in response to allegations made to the DoD Hotline. The objective of this audit was to determine whether the Defense Microelectronics Activity (DMEA) resolved customer requests for microelectronics using the Advanced Reconfigurable Manufacturing for Semiconductors (ARMS) facilities.

 

Background

The DoD Hotline received an allegation that the DMEA was not capable of performing one aspect of its mission to manufacture integrated circuit chips (chips) that were not commercially available for DoD weapon systems.1 The allegation also stated that the DMEA received requests to design and manufacture tens of thousands of obsolete chips needed to keep DoD weapon systems operational. The allegation stated that of the thousands of obsolete chips, the DMEA had fielded only five chips that were manufactured in the ARMS foundry.

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 ARMS facilities include the ARMS foundry and other ARMS labs, such as the Science and Engineering Gamma Irradiation Test Lab, for radiation testing; the Packaging and Assembly Substrate Lab, for cutting and packaging wafers and for producing higher-level assemblies, such as circuit boards; and labs for conducting assurance and forensic activities, reliability testing, and other device testing.

The ARMS foundry became operational in November 2003 and, with the other ARMS labs, takes silicon starting material and produces chips to support existing DoD weapon systems. The end product of the ARMS foundry is wafers. According to a DMEA official, a wafer begins as a disc of silicon, upon which semiconductor materials are deposited in sequence to create the necessary circuit pattern. The DMEA can produce a single wafer or groups of wafers, called lots. The DMEA’s Packaging and Assembly Substrate Lab cuts the wafers into pieces, called die, that each contain one copy of the circuit, and then packages the die in cases to prevent physical damage and corrosion. A packaged die is a chip.

DoD program managers, DoD technology and engineering personnel, officials from other Government agencies, and Defense industry personnel (customers) can request microelectronic solutions from the DMEA. DMEA solutions range from simple device replacement, system redesign, or redesign of an obsolete chip, to testing a chip for operating effectiveness, reliability, or authenticity. Between January 1, 2014, and June 30, 2019, the DMEA received 1,592 customer requests. Of the 1,592 customer requests, 908 (57 percent) were from the Military Services and other DoD agency customers and the remaining requests were from other Government agencies (14 percent) and non-Government entities (29 percent).

 

Finding

 The DMEA generally resolved customer requests for microelectronics using the ARMS facilities. Specifically, the DMEA identified solutions for 882 of the 908 DoD requests (97 percent) that did not require the use of the ARMS foundry. In addition, between January 1, 2014, and June 30, 2019, the DMEA used the ARMS foundry to fabricate five wafer lots for five DoD customer requests. The DMEA was unable to provide solutions for 10 DoD requests because of a lack of technical data or a lack of DMEA engineering resources or processes to provide a solution. Furthermore, 11 DoD customers did not pursue a DMEA solution because the customer identified its own solution or the customer did not respond to DMEA followup requests.

While the DMEA was able to resolve the majority of customer requests, it is not clear whether the DoD’s current use of the ARMS foundry is justified. The DMEA spent $32.4 million between January 1, 2014, and June 30, 2019, to maintain the ARMS foundry while using it to address only 5 DoD customer requests. The DMEA also budgeted $35.8 million to maintain the ARMS foundry from July 1, 2019, through June 30, 2024.

 

Recommendations

We recommend that the Director of Defense Research and Engineering for Research and Technology, Office of the Under Secretary of Defense for Research and Engineering, complete an assessment of the use of the existing foundry and determine whether the existing foundry is still needed.

 

Management Comments and Our Response

The Acting Director of Defense Research and Engineering for Research and Technology, Office of the Under Secretary of Defense for Research and Engineering, agreed with our recommendation and stated that she will conduct the assessment. Comments from the Acting Director addressed the specifics of the recommendation because the Acting Director will conduct the recommended assessment; therefore, the recommendation is resolved but will remain open. We will close the recommendation once the Office of the Under Secretary of Defense for Research and Engineering provides documentation to verify that an assessment of the use of the existing foundry was completed and a determination was made regarding whether the existing foundry is still needed.

 

 

This report is the result of Proj. No. D2019-D000AT-0182.000