[Congressional Record Volume 167, Number 80 (Monday, May 10, 2021)]
[Senate]
[Pages S2404-S2405]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                         Domestic Manufacturing

  Mr. CORNYN. Madam President, this has been a tough year since COVID-
19 became a global pandemic. There are many lessons to be learned from 
this pandemic. One of them that jumps out at me as being abundantly 
obvious is the real-world consequences of vulnerable supply chains.
  We almost began to believe, because cheap consumer goods could be 
made in China or someplace overseas, that that was the optimal 
arrangement. And certainly consumers in America have benefited from low 
prices when it comes to a number of things that are not made in this 
country. But some of the things that we depend upon, whether it is for 
public health or to keep our economy going or for our national 
security, are dependent on vulnerable supply chains.
  Perhaps the easiest one for everybody to identify with was the 
shortage of personal protective equipment. I remember when I called my 
Governor in Texas, he said: Two things you can get us--more PPE and 
more testing.
  Well, we produce so much testing capability now you don't hear much 
about that. But it was true that our hospitals needed masks, gloves, 
gowns, and ventilators to keep our frontline healthcare workers safe as 
well as other patients. At one point the situation became so dire, when 
it came to personal protective equipment, that first responders asked 
the public to help boost their supplies. They welcomed donations of N-
95 masks from folks who had extra boxes in their garage or gloves from 
hair salons that had closed their doors. We didn't reach that point 
because of the lack of preparation by those hospitals or healthcare 
workers but because of our reliance on other countries to produce that 
essential medical gear.
  China, it will surprise no one, is a major supplier of PPE. And since 
much of their stock was sent to hot spots in the earliest days of the 
pandemic, including in Wuhan, we were left to rely on the relatively 
small number of domestic manufacturers here in the United States.
  But I am here today not to talk about PPE but another supply chain 
breakdown with far-reaching consequences, and this time it is 
semiconductors. While semiconductors are something that perhaps most 
people are not intimately familiar with--but let me put it this way: 
Anything that has an on-off switch involves a semiconductor.
  They are the underlying technology in our most used products, things 
like cell phones, computers, cars, televisions, dishwashers. That is 
right, just about anything with an on-off switch. These are small 
integrated circuits that keep getting smaller and smaller and smaller, 
which means you can put them on a device like this; whereas, in the 
past, you may recall, Madam President, I remember the first cell phones 
that came out looked like a brick, but because semiconductors got so 
much more sophisticated and so much more powerful, you can put 
hundreds, perhaps thousands, of them on a device like this. These chips 
are necessary not just for consumer products but for other things as 
well, like the cell towers that keep us connected and the advanced 
weapon systems that support our national security. Even ventilators at 
hospitals require semiconductors.

  In short, we need semiconductors for our most prevalent and critical 
products, but the vast majority of chips are no longer made in the 
United States. Taiwan dominates semiconductor manufacturing, and one 
company, Taiwan Semiconductor Manufacturing Company, virtually controls 
the market. Last month, TSMC accounted for more than half of the total 
foundry revenues. Foundries are the manufacturing facilities that make 
semiconductors. Companies in Taiwan control 63 percent of the global 
market.
  Well, you don't have to look very far to see what a supply chain 
breakdown might look like because currently we are getting a taste of 
what it is like to not have access to the semiconductors that the U.S. 
economy needs. Right now, the demand for chips far exceeds supply. 
There is a global shortage of semiconductors that is creating serious 
impacts in nearly every industry, from consumer electronics to national 
security.
  Texas is home to companies across a whole range of affected 
industries, and last week, I was able to sit down with leaders from a 
few of those companies in Dallas to learn more about the impact of this 
shortage.
  We heard from a Hewlett Packard executive about the difficulties this 
has created in consumer electronic manufacturing covering a whole gamut 
of products.
  An executive from Raytheon, a national defense company, talked about 
how a steady supply of chips is important to our national security. 
These tiny technologies, these tiny circuits help support American 
warfighters around the globe.
  We know now that the auto industry is among the hardest hit, and I 
heard from leaders last week from General Motors and Toyota about how 
their companies are coping. Chris Nielsen from Toyota said that when he 
first started with the company, you could count the number of chips on 
a given vehicle on two hands. That is certainly not the case today. 
Think about all the high-tech features in cars these days--navigation 
devices, Bluetooth, automatic braking, backup cameras, and a variety of 
sensors. All of those depend on semiconductors, and that is on top of 
standard features like power steering, electric windows, air-
conditioning, and windshield wipers. This adds up to dozens and dozens 
of chips for the various components of a single vehicle, and that 
supply is getting harder and harder to come by.
  At the beginning of the pandemic, automaker suppliers predicted a 
drop in car sales and canceled existing chip orders. Semiconductor 
manufacturers replaced the auto chip capacity with other in-demand 
things like personal computers for kids learning at home or more 
ventilators to use with COVID-19 patients. But Americans kept buying 
cars at the prepandemic level.
  Unfortunately, the shortage of semiconductor manufacturing capacity 
and the long lead time for chip making has meant a shortage of chips 
that will likely last through the summer for the auto industry, and it 
has forced many auto makers to slash production because they simply 
don't have enough chips, and they are laying workers off. Some have 
shifted production to focus on the most in-demand models, while others 
removed some of the tech bells and whistles.
  But the impact goes far beyond the options available on a car lot. 
For every production or assembly line that is cut, there are hard-
working men and women who lose their jobs, as I said. As a reminder, 
this industry reaches across virtually every business and every 
national security company in America--automotive, consumer electronics; 
everything from the F-35, our fifth-generation stealth fighter, down to 
your cell phone, agriculture. Some of them even power children's toys.
  Well, there is a clear problem with this vulnerable supply chain, and 
the question is, How do we fix it? How do we solve it? When we faced 
supply chain shortages at the start of the pandemic, companies of all 
types began to shift their manufacturing to help alleviate some of the 
strain. Distilleries

[[Page S2405]]

in Texas and across the country began making hand sanitizer, and 
everyone, from big clothing manufacturers to entrepreneurial kids, 
produced cloth face masks. But with semiconductors, it is not that 
simple. In order to build a single chip, you need a very expensive, 
highly advanced piece of equipment. You also need skilled workers, and 
you need a lot of lead time. It can take months to create a single 
chip.
  Building a new foundry, which is a manufacturing facility, is a huge 
and expensive undertaking. A single foundry can cost upwards of $10 to 
$20 billion. Yes, that is with a ``b.'' It is $10 to $20 billion for a 
single foundry.
  During our conversations last week in Dallas, a Qorvo executive 
talked about how the process of building a new chip fab isn't just 
expensive, it takes a lot of time. It can take years to receive all of 
the necessary equipment.
  Time is of the essence, and fortunately a solution is not as daunting 
as it could seem. In part because of the dependency of this vulnerable 
supply chain, particularly with Taiwan, Senator Mark Warner, chairman 
of the Senate Intelligence Committee, and I introduced the CHIPS for 
America Act to help bolster our domestic semiconductor manufacturing. 
When we first introduced this bill, the chip shortage wasn't nearly as 
pervasive as it is now, but the writing has been on the wall for years.
  As our reliance on semiconductors has steadily increased, the U.S. 
share of global semiconductor manufacturing has decreased. Since 2000, 
the United States has dropped from producing roughly a quarter of the 
world's semiconductors to only 12 percent. And I am sure it comes as no 
surprise that as our manufacturing capacity has gone down, China's has 
gone up. In the same period of time, China has gone from manufacturing 
zero chips to 16 percent of the world's supply, and it plans to invest 
another $1.4 trillion in semiconductor technologies.
  Yes, America has lost ground to our global competitors, and unless we 
take action, it is estimated that by 2030, 83 percent of global 
semiconductor manufacturing will be in Asia. This presents a huge risk 
to both our national security and our global competitiveness, and we 
need to take action now to reverse the tide.
  That is what the CHIPS for America Act will do. The premise of this 
legislation is straightforward: create a Federal incentive program to 
encourage chip manufacturing in the United States of America. Rather 
than relying on foreign manufacturers or competing against other 
countries for the small supply of chips, let's bolster the supply of 
American-made semiconductors. This way, we can secure some of our most 
vulnerable supply chains. We can create thousands of well-paying 
American jobs and boost our global competitiveness by supplying made-
in-America chips to our friends and allies around the world.
  In the 1980s, President Reagan and Congress led the defense budget 
buildup to counter military-based, geostrategic threats that 
contributed to the end of the Cold War. This legislation fills a 
similar purpose by securing our critical supply chain from the ever-
evolving economic and national security challenges ahead.
  Other governments have made similar investments in semiconductor 
manufacturing--not only China but South Korea, Taiwan, Singapore, and 
Germany, among others, including a more than $100 billion pledge to 
boost semiconductor manufacturing in the European Union. It is time for 
the United States not to just follow suit but to lead.
  The CHIPS for America Act has received broad bipartisan support both 
in the House and the Senate, and it became law in January. That is the 
authorization part, but now we have the important job of backing these 
programs with funding
  Back in February, I spoke to President Biden about the importance of 
getting this done, and I am glad to say that there is bipartisan, 
bicameral support, and the administration has made this a priority as 
well.
  Last month, I sent a letter to President Biden urging him to 
prioritize funding for these initiatives, and more than 70 colleagues, 
Republicans and Democrats from the House and the Senate, cosigned the 
letter. If we are looking for something important to do that has broad 
bipartisan support in both the House and the Senate and is supported by 
the Biden administration, this is it.
  Bolstering domestic semiconductors is good for our economy, our 
national security, and our global competitiveness. This current 
shortage is a reminder of how critical it is to take action today so a 
lean supply of semiconductors does not become the new normal. We have a 
big opportunity ahead of us, and success is our only option.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.