The White House is pushing Congress to approve $52 billion in spending to beef up domestic production of semiconductor chips which will help boost the economy and increase national security.
Speaking with reporters on Wednesday, Commerce Secretary Gina Raimondo said the need for the proposed bipartisan legislation, known as the CHIPS for America Act, has never been greater.
“It will help America compete with China and unleash the next generation of innovation in the United States, strengthening our supply chains and providing the semiconductors we need,” Raimondo said.
According to the Commerce Department, just 12% of all semiconductors are produced domestically, leaving the country vulnerable to supply chain disruptions that damage the U.S. economy. A single company in Taiwan is responsible for producing nearly all of the most sophisticated chips, which Raimondo says highlights the fragility of the supply chain.
“It’s those chips we need for military equipment, artificial intelligence, quantum computing, communication devices. Our extreme dependence on other countries for semiconductors means we’re very vulnerable. If there’s a COVID outbreak, a natural disaster, political instability that disrupts a foreign semiconductor facility, we feel it here in the United States,” Raimondo said.
Raimondo warned Utah would not be immune from a chip shortage.
“If we don’t increase domestic production of semiconductors, Utah’s tech sector and Silicon Slopes is chock full of fast-growing, innovative tech companies. All of them need advanced chips to provide products and keep their companies going,” she said.
Texas Instruments operates a chip manufacturing plant in Utah.
Just last month, the primary semiconductor supplier for Apple and Intel halted production in China due to an outbreak of COVID. A major supplier of automobile chips in Japan suspended production at two facilities following a recent earthquake. The CEO of BMW recently warned that the semiconductor shortage would likely remain a problem next year.
The House passed a version of the proposal in February as part of a larger bill to make the U.S. more competitive with China. The America Competes Act includes $52 billion to increase domestic chip production and another $45 billion in grants and loans to bolster manufacturing facilities and strengthen the supply chain. None of Utah’s House Republicans voted for the bill.
The Senate version, dubbed the Bipartisan Innovation Act, creates the country’s first “Supply Chain Resilience Office.” Sen. Mitt Romney voted for the bill, while Sen. Mike Lee voted no.
Last week the Biden administration held a classified briefing for lawmakers laying out the risk posed to the American economy from a potential semiconductor supply chain shortage. The lack of semiconductors reduced the gross domestic product by a whole percentage point last year by one estimate.
“We don’t have time to waste on this,” Raimondo said. “It takes a year and a half or more to build a new semiconductor manufacturing facility. We just don’t have time to waste,” Raimondo said.
