US government awards 7 year contract for high security microchips for US jets and spy satellites to the government of the United Arab Emirates, a Middle East country with no democratically elected institutions-WSJ, 6/5/16

"Abu Dhabi is the federal capital of the United Arab Emirates and the largest of the seven emirates." There are no general elections in UAE nor any democratically elected institutions.
 
6/5/16, "Pentagon Hires Foreign Chips Supplier," Wall St. Journal, Doug Cameron

"Globalfoundries, owned by Abu Dhabi, will make microchips for U.S. jets and spy satellites"

"The Pentagon has decided to rely on an Abu Dhabi-owned company to supply the most advanced microchips used in U.S. spy satellites, missiles and combat jets.

A senior U.S. Defense Department official said in an interview that the Pentagon has reached a seven-year agreement with Globalfoundries Inc., one of the big four global chip makers, to supply the microchips. Terms weren’t disclosed.

The agreement ends months of uncertainty over supplies of such chips but is just the first step in a broader effort to protect sensitive military systems from cyberattacks and other tampering.

Globalfoundries last year acquired from International Business Machines Corp. the two plants—in Burlington, Vt., and East Fishkill, N.Y.—that make the chips. IBM had been the near-monopoly supplier of the chips to the Pentagon for more than a decade and paid Globalfoundries $1.5 billion to take the unprofitable business off its hands.

Lawmakers and watchdogs such as the Government Accountability Office had expressed concern about the Pentagon’s reliance on a single source for some of its state-of-the-art chips. “Due to market trends, supply chain globalization and manufacturing costs, the [Defense Department’s] future access to U.S.-based microelectronics sources is uncertain,” the House Armed Services Committee said in a recent report.

The new Globalfoundries agreement, which was previously undisclosed, runs until 2023. Meanwhile, the Pentagon will seek to identify more suppliers and expand protections needed to prevent chips from being tampered with or falling into the wrong hands.

The Pentagon also is moving away from a reliance on purely U.S.-made chips, widening its net of vendors to keep up with changes in commercial technology that are outpacing the defense world.

“Our goal is to look globally,” Andre Gudger, the Pentagon’s deputy assistant secretary for manufacturing and industrial base policy, said in an interview. “We want access to the latest and the greatest.”

The plants where chips are assembled have long been viewed by the Pentagon as a vulnerable part of the military supply chain.

The biggest concerns were over technology theft and any insertion of rogue elements that could be remotely triggered to access equipment, or so-called kill switches that render equipment useless. In 2004 the Pentagon launched a vetting system of what are now more than 70 companies, including about 20 so-called trusted foundries. But the two heavily guarded former IBM factories in Vermont and upstate New York produced almost all of the custom-made chips used in the most sensitive weapons systems, effectively leaving the government reliant on a single supplier in the U.S.

With the semiconductor industry’s center of gravity shifting to facilities in Asia that churn out hundreds of millions of chips for consumer-electronics devices, the Pentagon has much less influence on an industry it helped fund and develop in the 1960s and 1970s.

While military users accounted for as much as one-quarter of global chip demand in the early 1980s, that had fallen to less than 0.1% by the turn of this decade, according to the Trusted Access Program Office, which coordinates buying for the Pentagon and intelligence agencies.

The military relies on customized chips rather than the mass-produced ones used in cellphones. For instance, while the new F-35 combat jet contains several hundred advanced chips—manufacturer Lockheed Martin Corp. won’t disclose the exact number—production runs for the most sensitive military-grade processors range from a few dozen to 1,000. That compares with tens or even hundreds of millions for consumer-electronics devices.

Chip makers have shifted their focus to the larger consumer market, where competition led to technology being refreshed in months or weeks, while military chips ordered in small numbers might be upgraded once or twice a year, industry officials said.

“We have fallen behind in what our typical electronics have in them,” said Bill Chappell, a program director at the Pentagon’s Defense Advanced Research Projects Agency, known as Darpa.

Opening the military market to more producers of the most advanced commercial chips, would allow the Pentagon to keep pace with technology developments, officials said. But that also will require new ways to monitor chips to ensure they haven’t been tampered with, whether manufactured in the U.S. or overseas.

For example, Darpa is developing a tiny tagging device for chips that can be embedded in processors from any manufacturer and used to detect malicious content or an attempt to tamper with the technology.

“There’s a lot of wariness and concern, but it’s a great opportunity to open the door to a much greater supply chain,” Mr. Chappell said.

Mr. Gudger, the Pentagon official, said the Darpa technology is only one avenue being explored. While others are largely classified, options include “blind” manufacturing where chip makers produce individual parts that are later assembled in a secure facility.

The work on vetting and tagging chips has also attracted interest from other industries, including utilities and financial services, looking to counter the rising threat of cyberattacks.

Globalfoundries-which has expanded through acquisitions and has significant operations in Germany, Singapore and upstate New York-provides the Pentagon’s immediate needs. But a coalition of U.S. chip makers including Cypress Semiconductor Corp. has been pressing the Pentagon to help fund upgrades to fabrication plants owned by U.S. companies to allow them to take on the most sensitive work.

For some, the main safeguard remains keeping the trusted-foundry program focused on domestic manufacturing. 

“That [chip] foundry needs to be in the U.S.,” said Norton Schwartz, Air Force chief of staff from 2008 to 2012 and now president of Business Executives for National Security, an industry trade group."


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"Abu Dhabi Emirate"

"Abu Dhabi is the federal capital of the United Arab Emirates and the largest of the seven emirates. The Emirate lies on the borders with the Kingdom of Saudi Arabia, the Sultanate of Oman and the Arabian Gulf. The emirate comprises 200 islands and has 700 kilometres coastline."

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Added:

6/6/16, "Pentagon To Buy Advanced Microchips From Company Owned By Abu Dhabi," Daily Caller, Jonah Bennett

"When chips are manufactured abroad by companies outside of the United States, the problem arises of other sovereign powers using these companies as proxies to penetrate U.S. security by installing killswitches or other malicious content....

The future of Globalfoundries is not even secure. Abu Dhabi as of November has mulled over selling part or all of the company to potential buyers. The company could be valued at anywhere from $15 to $20 billion. Part of the reason for the possible sale is that the United Arab Emirates has hit a huge slump since the price of oil has tanked, even though developing a chip manufacturing industry was part of the country’s plan to diversify away from oil."

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UAE doesn't accept refugees, grants no asylum for any reason:

p. 12, "Protection of Refugees"

"The country's laws do not provide for the granting of asylum or refugees. The country is not a party to the 1951 Convention relating to the Status of Refugees or the 1967 Protocol relating to the Status of Refugees. There is no system for providing protection to refugees, and the government did not provide protection against the expulsion or return of refugees to countries where their lives or freedom would be threatened on account of their race, religion, nationality, membership in a particular social group, or political opinion."

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Added: Islam is the official religion of the United Arab Emirates.

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