[Congressional Record Volume 167, Number 88 (Thursday, May 20, 2021)]
[Senate]
[Pages S3314-S3316]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                S. 1260

  Mr. CORNYN. Mr. President, in my lifetime, China has gone from a poor 
and isolated country to now accounting for nearly 20 percent of global 
gross domestic product. There is no doubt that the ingenuity of the 
Chinese people has contributed to this success, but we know the driving 
force behind this dramatic rise is the aggressiveness of the Chinese 
Communist Party. Its aims can be summed up with four R's: resist, 
reduce, replace, and reorder.
  China resists American economic influence by manipulating American 
businesses and industries and stealing intellectual property. It 
reduces internal dissent and free expression of ideas through mass 
surveillance and censorship of its own people, and it seeks to exert 
its power and influence in the United States. The Chinese Communist 
Party intends to replace America as the world's technology leader 
through the Made in China 2025 initiative, which seeks to achieve 
Chinese dominance in high-tech manufacturing. Finally, it hopes to 
reorder international norms and institutions around itself. That is 
their vision. That is their strategy. That is their plan.
  Now, the Chinese Communist Party's ruling strategy can best be 
described as ``win at all costs.'' In other words, they do not play by 
the same rules we do. And make no mistake, these ambitions paint an 
alarming picture for the United States and our allies.
  Former Attorney General Bill Barr said last year: ``It is clear that 
the PRC,'' or People's Republic of China, ``seeks not merely to join 
the ranks of other advanced industrial economies, but to replace them 
altogether.''
  In everything from electric cars to advanced robotics, to artificial 
intelligence, China aspires to lead global

[[Page S3315]]

production and to dominate global production, and they are throwing 
serious money into the effort to get China there. China is expected to 
spend $1.4 trillion by 2025 covering investments in everything from 5G 
to artificial intelligence.
  This is not the time for the United States to be complacent, to sit 
back and watch the Chinese Communist Party pursue tech domination. By 
the time it has made significant progress, we would be too late. We 
need to take action now to ensure that our economy and our military can 
continue to outcompete China, and that is precisely what we can achieve 
through the Endless Frontier Act.
  As Leader McConnell said, a robust amendment process will be critical 
to this piece of legislation. As I was discussing with Senator Schumer 
this morning, for most Members, this 1,500-page substitute bill landed 
on their desks just a little bit earlier this week, so it is going to 
take a little time for us to understand and to digest the complexity 
and the ambitions, really, I should say, of this bill.
  In the coming days, I hope the Senate will vote on amendments from 
Members on both sides that will strengthen this legislation and ensure 
that it addresses the broad range of strategic threats we are facing.
  One of the most urgent priorities is to secure the supply chains of 
our most important products. We really learned that from the pandemic. 
When the COVID-19 virus hit, starting in China and then spreading 
around the world, we learned that China made most of the personal 
protective equipment in the world, and thus we were competing with 
China and other parts of the world to get access to the personal 
protective equipment that our first responders, our frontline 
healthcare workers, and others needed in order to be safe. That was one 
of the first signs that our supply chains may be vulnerable.
  But before any piece of technology becomes usable for its audience, 
it includes parts and pieces and materials that literally come from 
around the world. This was the theory of globalization: Go wherever 
this product can be produced the least expensively. But we didn't count 
on pandemics. We didn't count on natural disasters. We didn't count on 
the potential for military conflict to jeopardize the availability of 
these essential products. Regardless of where a product is finally 
assembled and packaged, each of those individual pieces is key to 
protecting the supply chains of our most valuable assets.
  Right now, supply chains for everything from cars and cell phones to 
missile defense, to communication systems are at risk because of one 
tiny piece of technology called a semiconductor or a microelectric 
chip. It goes by numerous names.
  I have shown a floor chart previously, and I will probably bring it 
out again sometime here before we are through, but the fact is, the 
United States relies heavily on other countries for these essential 
advanced semiconductors.
  Nearly 90 percent of those chips are made by companies in Southeast 
Asia, including Taiwan. As a matter of fact, Taiwan alone produces 63 
percent of the world's advanced semiconductors, and we depend on that 
sole source for these most advanced microchips. One company, Taiwan 
Semiconductor, accounted for more than half of the total foundry 
revenues last year, and, as I said, companies in Taiwan control 63 
percent of the market.
  If for any reason that supply chain was cut off, it would lead to 
very, very serious economic and security consequences across our entire 
economy. In recent months, we have gotten a glimpse of what this might 
look like, particularly when it comes to our car manufacturing 
capacity.
  At the beginning of the pandemic, automaker suppliers predicted a 
drop in car sales, and so they canceled their orders for semiconductor 
chips. Semiconductor manufacturers replaced the auto chip capacity with 
other in-demand products, like chips for personal computers that kept 
kids learning while they were at home or chips that went into 
ventilators to keep COVID-19 patients alive. But American consumers 
kept buying cars at prepandemic rates, and the carmakers needed to make 
up for the chip to meet that demand. Unfortunately, restoring the 
production of auto chips is not a quick or easy process. There is a 
long lead time, in fact, to manufacturing a single chip, which can take 
up to 6 months.

  Although chipmakers are filling auto chip orders, we are still likely 
to face a shortage that may last throughout the summer. In response, 
some automakers have removed certain technology and extra features, 
like GPS, from vehicles in order to reduce the number of chips they 
need. Others have cut production across the board and laid off some of 
their workforce. But as bad as that may sound, it could be much, much 
worse.
  The squeeze we are feeling now is more or less the result of a 
backlog, and we have every expectation that in a few months, things 
will return to normal. But what if, instead of a decrease in supply due 
to increased demand, the supply was cut off entirely? This is not some 
fictional doomsday scenario; it is a real possibility. Our dependence 
on other countries for these chips could leave us in a very vulnerable 
position if access were suddenly cut off or restricted.
  Unlike the supply chain shortages we experienced at the start of the 
pandemic for things like PPE, hand sanitizer, and the like, there is no 
quick fix here. In order to build a single chip, you need very 
expensive and highly advanced equipment. You need the skilled 
workforce. And, as I said before, you need quite a bit of time because 
it can take months to build a single chip, and that is assuming you 
have the facility and all the equipment ready to go.
  A couple of weeks ago, I met with executives in Dallas who represent 
a full range of businesses and industries impacted by the current chip 
shortage. An executive at Qorvo talked about how the process of 
building a new chip fabrication facility isn't just expensive; it is 
time-consuming. It can take years to receive all of the high-
functioning equipment necessary to build advanced microchips. Building 
a foundry is a huge undertaking that requires a massive investment. A 
single foundry where these advanced semiconductors are built can cost 
upwards of $10 to $20 billion--$10 to $20 billion. Indeed, that is the 
reason why we are so reliant on Taiwan, because it is a low-cost 
provider. Again, we made the mistake of thinking that cost was the only 
thing that mattered, as opposed to dependability of our supply chain. 
So there is a clear need to bolster our domestic semiconductor 
manufacturing.
  The United States is not the only country that sees the handwriting 
on the wall. Other parts of the world, from South Korea to China 
itself, to the European Union, are investing billions of dollars in new 
manufacturing capacity. Right now, as I speak, there is one 
semiconductor foundry being planned for Arizona by Taiwan 
Semiconductor. China is building 17 while we are just getting started 
to build 1.
  As I said, the European Union is investing huge amounts of money, 
about $35 billion; South Korea is investing $65 billion; and China is 
investing a whopping $150 billion in semiconductor manufacturing. Other 
countries around the world recognize the risks to their economy and 
their national security given the current semiconductor manufacturing 
landscape.
  Our competitors are pouring tens of billions of dollars into boosting 
their supplies, and the United States needs to do likewise, which is 
why Senator Warner, the Senator from Virginia, and I introduced CHIPS 
for America Act last year. The premise of this legislation is 
straightforward: to create a Federal incentive program to encourage 
chip manufacturing here in the U.S. of A. Rather than rely on 
manufacturers in Taiwan or China or compete against other countries for 
the limited supply of chips worldwide, let's bolster the supply of 
American-made semiconductors. This way, we can secure our most critical 
supply chains, 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.
  We weren't alone in thinking this is a good idea. In fact, when we 
considered the authorization for this CHIPS for America Act in the 
Defense authorization bill last December, it passed with a vote of 96 
to 4. So it is clear that the entire Senate understands the

[[Page S3316]]

gravity of this issue and its importance. That authorization became law 
in January, and now we have the job of fully funding these programs so 
they can actually get to work turning over dirt and getting these 
foundries off the ground.
  The strong support for this legislation on a bipartisan basis shows 
that this is a priority for a majority of the Members of this body. 
There is no reason these funding programs shouldn't be bipartisan too.
  We are already seeing divisions about provisions related to the 
payment of a prevailing wage, so-called Davis-Bacon provisions, which 
is, frankly, dividing us, which is a moot issue given the current wages 
of U.S. semiconductor manufacturing companies. It is a nonissue for 
them. Yet some of our Democratic colleagues decided to insert this 
divisive issue in this underlying Endless Frontier bill.
  We should not allow unnecessary or purely political provisions to 
weaken our strong support to our consensus commitment to deal with 
these vulnerable supply chains. I am committed to securing funding to 
bolster our domestic semiconductor manufacturing, and there have been a 
lot of conversations about the most effective way to do so. But let me 
be clear. The Davis-Bacon provisions inserted into the committee markup 
in the Endless Frontier bill is jeopardizing this funding.
  I hope our friends on the other side of the aisle will work with us 
in good faith to come up with a compromise that allows this funding to 
pass with broad bipartisan support, just like the CHIPS for America 
Act. There is a clear and present need and, I might say, a clear and 
present danger to the United States.
  We need to bolster our domestic semiconductor manufacturing and 
secure one of our most vulnerable supply chains. As I said, this is a 
matter of both our economic and national security and something far too 
important to fall prey to partisan jockeying.
  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.
  Ms. CORTEZ MASTO. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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