[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.