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US Senate's passing of semiconductor funds will secure supply chain: Cornyn


Lack of US investment has led to reliance on imports

Pandemic, other emergencies leave nation vulnerable for supply

The US Senate's recent approval of a $52 billion investment package to boost domestic semiconductor research and manufacturing will protect the nation's critical supply chain of the product and reduce reliance on imports during future emergencies, Republican Senator John Cornyn of Texas said June 10.

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"Imagine if another pandemic or a natural disaster or a military conflict would occur that would cut off our ability to import those semiconductors, particularly from Taiwan, which manufactures 63% of the advanced semiconductors in the world, the ones we need the most," Cornyn, a member of the Senate Select Committee on Intelligence, said during a press conference. "We've become overly reliant on those imports."

The funding was included in the US Innovation and Competition Act passed by the Senate in a bipartisan 68-32 vote June 8. The legislation will now move to the US House of Representatives for final approval.

Cornyn said the importance of semiconductors in modern society is equal to that of oil, which prompted the Senate's urgency to provide support for the domestic chip industry.

"It just makes sense for us to work together to try and come up with the $52 billion for this purpose," he added. "We saw a very strong bipartisan vote to pass this important piece of legislation that will protect our economy, protect our national security and bring a lot of really good-paying jobs back onshore to America."

Semiconductors are used in most modern technological applications, and the global chip supply crunch has disrupted production in multiple industries as demand for electronic products has spiked.

The supply disruption has notably affected automobile manufacturers around the world, with many automakers adjusting operations and temporarily idling facilities to prioritize semiconductor supply for certain in-demand vehicle models. Production of other vehicle models has been curtailed, lowered, or left incomplete until more chips become available.

US must catch up to foreign competition

Democratic Senator Mark Warner of Virginia, the chairman of the Senate Select Committee on Intelligence, said the US' current lack of domestic semiconductor supply resulted from the offshoring of production over several decades.

"I think we had this idea with the globalized economy that whoever could do it the cheapest, that was the only consideration," he said. "Of course, in a free market world economy, they are going to find the lowest cost producer, but what opened our eyes was COVID-19 and the vulnerability of our supply chains."

The US has now fallen behind many other countries that have invested heavily in their semiconductor manufacturing capabilities, the senator said.

"We have not been doing virtually any new [semiconductor] manufacturing facilities here in this country as other nations are making dramatic investments... and we have to be able to counter that," he added.

Conversely, China's efforts to bolster its semiconductor production capacity sharply contrast with those in the US.

"China has committed to investing $150 billion in the industry, and they actually hope to get 70% of the semiconductor manufacturing market by 2030," Warner said. "Unfortunately, in the US, we have gone from about 30% of the market a couple of decades ago down to single digits at this point."