[Congressional Record Volume 168, Number 119 (Tuesday, July 19, 2022)]
[Senate]
[Pages S3350-S3353]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               CHIPS Act

  Mr. PORTMAN. Madam President, I come to the floor of the Senate today 
because we are poised to begin consideration of a really important 
piece of legislation. It is a plan to make America more competitive 
with China and a plan to bring good jobs back to America. I am talking 
about the bipartisan CHIPS Act, which includes reshoring semiconductor 
manufacturing to America and giving American workers and American 
companies the tools they need to compete and win.
  Let me give some background on why this legislation is so badly 
needed. U.S. dominance in what is called semiconductor manufacturing 
has dwindled for decades, and it is an economic and a national security 
concern. The U.S. has always led the world in chip design. We

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came up with this technology, but our share of the global chip 
manufacturing capacity over the past 30 years has gone from about 37 
percent down to less than 12 percent today.
  As a result, we rely more and more on foreign countries for these 
essential chips; and in the past few years, the supply chain has not 
been reliable. You know that if you tried to buy a car recently--maybe 
even a washing machine--that you had to wait forever. Why? Because of 
the lack of semiconductors. These chips are just not available.
  We have all come to learn in recent years that semiconductors are the 
building blocks of everything--automobiles, cell phones, computers, 
household appliances, medical equipment, but also military systems and 
weaponry like the F-35. And in a more digital economy, by the way, that 
demand for these semiconductors, these chips, will only continue to 
grow.
  Last year, this lack of semiconductors caused an estimated loss of 
$240 billion to the U.S. gross domestic product. So a $250-billion hit 
to our economy, according to the Department of Commerce, last year just 
because of these supply chain issues with semiconductors.
  This is more complicated by the key role that our adversaries play in 
the production of these semiconductors and the fact that we rely on 
some very vulnerable nations for critical components of the supply 
chain. Neon gas, which is critical for the laser imprinting of the 
chips, comes largely from Ukraine. Taiwan is the No. 1 semiconductor 
fabricator in the world. By the way, 90 percent of the high-end chips 
are made in Taiwan; none are made here in America anymore--90 percent. 
Of course, Taiwan's proximity to China and the constant threat of 
invasion by China adds to the urgency of diversifying the semiconductor 
supply chain.
  By incentivizing companies to make these critical components here in 
America, we can make our supply chains more resilient; we can protect 
our national security; and we can boost economies all across the 
country. That is why the CHIPS Act is so important and why we have been 
working in a bipartisan fashion in Congress through legislation like 
this and the broader USICA legislation.
  This legislation would work to improve our Nation's competitiveness, 
generally, in technology, foreign relations and national security, 
domestic manufacturing, education, trade, and other matters. The CHIPS 
Act specifically would bring $52 billion in Federal investments for 
domestic semiconductor research, design, and manufacturing.
  This broader bill, the so-called USICA bill, last June passed this 
Senate with an overwhelming bipartisan vote. We had hoped that the 
House would simply pass the Senate approved bill because it was already 
bipartisan. It had been worked out with Democrats and Republicans here 
in the Senate. Nineteen Republicans supported it; all 50 Democrat 
Senators supported it; the White House supported it.
  Instead, the House sat on it. It took them almost a year--11 months--
to pass their bill. But when they passed it, it was filled with all 
sorts of unrelated items that no Republican could support. That is why 
this has gone so slowly.
  So earlier this summer, we began conferencing the House- and the 
Senate-passed bills, trying to find that common ground between the two 
bills. We made some progress, but both Chambers have yet to agree on a 
final product.
  Meanwhile, there is an urgency to get this done because it is 
critical to the decisions that employers are making right now to create 
and bring semiconductor manufacturing factories and jobs to America or 
to some other country.
  In January, Intel announced its plan to build a $20 billion site 
consisting of two semiconductor fabs in the United States and in my 
home State of Ohio. This is the largest investment in Ohio's history, 
by far. It comes with a grand total of, again, $20 billion, two fabs; 
and we hope that is just a start.
  Intel has said time and time again that if the CHIPS Act funding is 
enacted, this will move forward and move forward quickly. They have 
also said that if the CHIPS Act moves forward, it could be extended--
the $20 billion--to an up to $100-billion investment in Ohio. Remember, 
the $20 billion is hardly historic. That is because it would continue 
to build fabs--not just 2, but up to 10. This 3,000-acre site in Ohio 
could be home to up to eight additional fabs and make central Ohio the 
silicon heartland. This would be great for my State, great for our 
region, and great for our country.

  This initial investment, by the way, would create about 10,000 good-
paying jobs--3,000 on-site eventually, all good-paying, high-paying 
jobs, good benefits; but also 7,000 good-paying construction jobs in 
putting it together, tens of thousands of additional electrical, 
engineering, supplier, restaurant, housing, healthcare, and 
entertainment jobs to support the region as it expands thanks to this 
investment. The suppliers alone will be tens of thousands of new jobs.
  Ohio has already projected that this investment will add $2.8 billion 
to the State's GDP, and that is just a start. Investments, like what is 
in front of us in Ohio, by the way--as well as similar efforts in 
Arizona where the Presiding Officer is from, Texas where my colleague 
Senator Cornyn is from who is here on the floor with us today--are all 
perfect demonstrations of what this investment in semiconductors 
incentives can mean to American workers and American companies.
  China has committed a lot more than we are talking about as have, by 
the way, a lot of other countries. This is not a free market situation. 
One of my colleagues today asked me about, Shouldn't we just let the 
market decide? Well, if the market decides and China is offering $150 
billion--which they are, over the next 10 years--when Europe has its 
own equivalent legislation to ours and is offering tens of billions of 
euros, or when South Korea or when Japan or when Taiwan are offering 
these huge incentives, it is very difficult to see us being able to 
bring these chips back to America--where costs are a little higher--and 
be able to be competitive. And we need that to happen for our domestic 
economy, but also our national security.
  If we fail to act, we are going to miss a key opportunity here to 
boost our competitive edge as a nation because these fabs will go 
elsewhere.
  I would also like to see us include some of the other key pieces of 
the broader Senate passed USICA bill that was passed on a bipartisan 
basis--again, 19 of us supported that here on the Republican side. That 
includes critical new investments in research but also key protections 
to be sure that that research is not stolen by foreign governments, 
such as China.
  We have got to remember that the overall goal of this effort is to 
improve our country's competitiveness, especially with regard to China. 
To do that, we must not only invest in research and innovation, which I 
strongly support, but we must protect that taxpayer-funded research and 
intellectual property from being taken by our competitors like China 
and used against us. I believe, given current realities, without such 
protections, any bill with significant increased levels of Federal 
funding for research would be a huge giveaway to Beijing. Why do I say 
that? Because I have worked on this issue for the past 4 years. We have 
investigated it; we have held hearings; we have passed legislation.
  Recently, FBI Director Wray said it well:

       The biggest threat we face as a country from a 
     counterintelligence perspective is from the People's Republic 
     of China and, especially, the Chinese Communist Party. They 
     are targeting our innovation, our trade secrets, our 
     intellectual property on a scale that is unprecedented in 
     history.

  That is the Director of the FBI.
  Senator Carper on the other side of the aisle and I introduced what 
is called the Safeguarding American Innovation Act and insisted that it 
be included in the USICA legislation in order for us to support it. 
That was my condition for supporting the broader USICA bill. This came 
after we did a yearlong study with the Permanent Subcommittee on 
Investigations that found, shockingly, how China had used what are 
called talent programs for two decades--two decades--to target the most 
promising taxpayer paid research and researchers and to take that 
technology, that intellectual property, back to China.
  We found that the American taxpayers had been unwittingly funding

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the rise of China's military and economy over the past two decades, 
while the Federal Government had done very little to nothing to stop 
it. In fact, when the FBI testified at our hearing, they acknowledged 
that. They said, We haven't been focused on this in the past couple of 
decades like we should have been; we are going to now.
  And they started to. They started to make arrests--and you probably 
heard about some of these--arresting scientists all over the country, 
who are abusing our lax attitude toward protecting research by 
taking research back to China and using it, often, against us.

  This legislation goes directly to the root of the problem. It makes 
it punishable by law to knowingly fail to disclose foreign funding on 
Federal grant applications. That is not a law now. The FBI has asked us 
for that law. It requires the executive branch to streamline and 
coordinate grant-making between the Federal agencies so there is 
continuity, accountability, and coordination. That does not happen now. 
It is too wide open. It is not coordinated.
  It allows the State Department to deny visas to foreign researchers 
who are coming to the United States to exploit the openness of our 
research enterprise, and it requires research institutions and 
universities to do much more, including telling the State Department 
whether a foreign researcher will have access to export-controlled 
technologies.
  We have worked on this legislation, again, for the past few years. We 
have made lots of compromises and concessions with people who had 
potential concerns about it. We have come up with legislation that is 
bipartisan and makes sense. It has already passed, again, with an 
overwhelming margin here in the U.S. Senate. I want to be sure, before 
we spend billions of dollars more in Federal research, which is being 
proposed, including to the National Science Foundation, that that 
research can be protected. Who could be against that? Who could be for 
China being able to have better access to this information? Nobody.
  Again, a vital component of any competitiveness bill is this 
commonsense, extensively negotiated bipartisan bill, which is already 
included in the Homeland Security title of USICA.
  I can't express enough the importance of passing this legislation, 
and it should be done on a bipartisan basis because it has been done 
before. It just makes sense.
  The broader USICA bill and the chips bill are both important. To pass 
the chips legislation is critical right now; it is urgent. And then 
what we can pass in terms of USICA is also important. Again, if we are 
putting more money into research, which is being proposed and which I 
support, it has to be protected. That is pretty simple and common 
sense. There is no perfect bill, but this bill will help keep America's 
economy competitive. It will help keep American jobs here and grow new 
jobs, good-paying jobs with good benefits. We should pass this 
legislation, get it through the House, and take it to the President's 
desk for signature. I hope my colleagues will join me in supporting its 
passage.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Madam President, I want to express my gratitude to the 
Senator from Ohio for his excellent remarks and for his support getting 
us to the point we are today, which is on the cusp of a historic 
accomplishment--and that is to make sure that the supply lines of 
advanced semiconductors remains available to American businesses and, 
even more importantly, to our national security.
  Now, 2 years ago, Senator Warner, the senior Senator from Vermont, 
and I introduced the CHIPS for America Act. It has been a long, strange 
trip till today.
  I daresay at the time we introduced the bill, there were many people 
who didn't know the difference between chocolate chips and microchips. 
Frankly, that is an exaggeration, but the point is that most people are 
really unaware of the dependency of our economy and our national 
security and, frankly, just the quality of our life on access to these 
microcircuits known as semiconductors. And over time, the semiconductor 
manufacturers have been able to make them smaller and smaller and more 
and more powerful until your cell phone, which is essentially a 
minicomputer, contains thousands of these microchips. Again, whether 
you are talking about a laptop computer or a new car or a washing 
machine or just some desktop computer, all of them depend on access to 
these semiconductors.
  As I said, Senator Warner and I introduced the bipartisan CHIPS for 
America Act 2 years ago. Eighteen months ago, this legislation became 
law; that was as part of the National Defense Authorization Act. 
Thirteen months ago, the U.S. Senate passed a bipartisan bill to fund 
the program. Unfortunately, as the Senator from Ohio mentioned, the 
House failed to respond to the bipartisan USICA, the U.S. Innovation 
and Competition Act, and sent over a partisan bill, which has delayed 
our consideration of this important legislation unnecessarily.
  Today, I am optimistic that the Senate will follow up on its 
commitment to enact this chips funding into law before we break for the 
August recess. This afternoon we will take a procedural vote to kick-
start consideration of the legislation. Of course, as we lead up to 
this important vote in debate, many of us have been talking about the 
size and shape of the bill on both sides of the aisle. And there is 
still some things that need to be decided, and the fate of the bill is 
not yet secure. Being the majority leader, Senator Schumer will 
ultimately be the one to determine what the size and shape of the bill 
will look like, but I am encouraged by where we stand.
  This bill will not, however, be the Senate's U.S. Innovation and 
Competition Act or the USICA bill or the House's massive partisan 
America COMPETES Act. This will be a far more narrow bill that focuses 
on the core issue of semiconductor manufacturing. Semiconductor 
manufacturing is, as I said, the key to our economy and our national 
security. As it turns out, most of the manufacturing capacity has been 
built overseas, primarily in Asia, because it is significantly cheaper 
to build those manufacturing facilities there rather than here. I am 
not opposed to additional Commerce provisions, for example--that have 
already been voted on as part of USICA--being included, but anything 
else that is included by Senator Schumer must be bipartisan, and those 
decisions have to be made very quickly. The time for voting on this 
bill should not be delayed any further.

  Over the last three decades, the United States has gone from making 
37 percent of these microcircuits, or semiconductors--37 percent--to 
only about 12 percent now. When you look at the most advanced chips, 
the smallest and the most powerful, none of these are made in the 
United States--none. Now, Taiwan's Semiconductor, located in Taipei, 
Taiwan, has a great business model: American companies design the 
chips, and they make them. As I said, it is cheaper to make them in 
Asia than it is here in America, but post-COVID we have come to realize 
the vulnerability of our supply chains for virtually everything.
  When you look at our dependency on the supply chain of these advanced 
chips and what it might mean to our country, well, it is shocking. The 
CEO of Micron, out of Idaho, has said there is a 35- to 45-percent cost 
gap between domestic and overseas production. Now, if you are talking 
about making toys or something like that or furniture items, it is 
great to have a cheaper alternative where that product is manufactured 
overseas rather than here in America. That is good for consumers as it 
makes things a lot more affordable, but when you are talking about a 
sole source for the most advanced semiconductors, that goes from being 
a convenience to a nightmare, and, of course, during the pandemic, we 
experienced a number of supply chain vulnerabilities. Now, as the 
economy around the world continues to expand, anybody who has tried to 
buy a car, a dishwasher, or a computer over the last couple of years 
has likely been impacted with higher costs or long delays or both.
  As a matter of fact, due to the shortages of supply, that has 
necessarily driven the costs higher, which has further exacerbated 
inflation, but there is an even more important reason to get this bill 
done.

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  The chip shortage and our lack of domestic manufacturing capability 
is a huge national security risk. That is why the Secretaries of the 
Departments of Defense and Commerce sent a letter to Congress a few 
weeks ago, saying very clearly:

       Funding the CHIPS Act is critical to our national defense.

  That is why the Republican-led Senate passed the original bill and 
helped it become law during the previous administration. That is why I 
hope the current Congress will fund it with today's vote--or with, 
actually, this week's vote.
  Whether it is advanced fighters, the fifth-generation stealth strike 
fighter, like the F-35; whether we are talking about quantum computing, 
the next generation of computing; or whether we are talking about 
missile defense systems or the Stinger or Javelin missiles that we have 
exported to Ukraine for them to defend themselves against Russian 
aggression, all of them depend on semiconductors. As a matter of fact, 
a single rocket interceptor used in Israel's Iron Dome, for example, 
contains more than 750 chips. An overreliance on other countries to 
produce the key components to our most vital defense assets is a huge 
and unacceptable risk.
  As I said, that is why Senator Warner and I initially introduced the 
bill in June of 2020 and why it has received such strong bipartisan 
support.
  Building a new foundry--or ``fab'' as they are sometimes called--is a 
huge undertaking and requires a massive investment. A single foundry 
can cost upward of $10 to $20 billion--$10 to $20 billion. Without some 
level of support from the government, these investments simply won't 
materialize, at least not in America. Other governments, as you have 
heard, have made similar investments in semiconductor manufacturing in 
trying to make sure that their supply chains are not vulnerable. 
Countries like China, South Korea, Taiwan, Singapore, Germany, and a 
number of others have included an over-$100 billion pledge to boost 
semiconductor manufacturing in the European Union alone. The United 
States simply cannot get left behind, and we can't keep dragging our 
feet.
  It doesn't just take a lot of money to get these foundries up and 
running; it also takes time. Last year, I hosted a roundtable in 
Dallas, TX, to talk about the impact of the chip shortage with industry 
leaders. During our conversation, a Qorvo executive talked about how it 
can take years to receive all of the high-functioning equipment that is 
necessary to make semiconductors. That is why there has been such a big 
push in Congress to get this funding out the door.

  Chip makers who have to make decisions about where and when to build 
their next manufacturing facilities need to know that these incentives 
are available for them to build those foundries here in America, and 
the window of that decision-making process is closing rapidly. If it 
closes--if we continue to drag our feet and not fund the chips bill--
they are going to pull their investments from new or expanded foundries 
in the United States and take them overseas. This isn't just a 
``Chicken Little'' claim. Companies have put out the warning call, and 
I believe them.
  One company called GlobalWafers is planning to build a new silicon 
wafer factory in Sherman, TX, which would create up to 1,500 new jobs 
and produce 1.2 million wafers a month. Silicon wafers are an essential 
component of semiconductors. Commerce Secretary Gina Raimondo said that 
the CEO told her that their plan to build this factory in Sherman, TX, 
is contingent on Congress passing the CHIPS Act. Unless the funding is 
approved by the August recess, which is rapidly approaching, the 
company will scrap its plans for that facility.
  As you heard from our colleague from Ohio, the CEO of Intel expressed 
a similar sentiment for a planned Ohio facility. He said the company 
would expand chip production in Europe instead of in America if 
Congress fails to pass this funding.
  Another company, NXP Semiconductors, is weighing new investments too. 
It is looking at expanding one of its factories in Austin, TX--a 
project that would cost, roughly, $2.6 billion. The company is planning 
to decide later this year whether to move forward with that investment 
or to take that investment to Europe or Asia.
  In other words, there are real consequences on the line. If Congress 
passes this chips funding act in the coming days, we can shore up this 
domestic supply chain vulnerability, bring good jobs back to America, 
and protect our economic and national security, but if we fail to act 
or if we fail to act with dispatch, all of those benefits will 
evaporate, and all of those dangers will become our worst nightmare. 
Instead of here in America, those benefits from building those fabs 
will rain down on communities on the other side of the planet instead 
of here at home.
  It has been more than a year and a half since the CHIPS Act became 
law, and we simply cannot afford to wait any longer. Every day that 
goes by creates additional risks. Unless Congress gets this job done in 
the coming days, these companies will simply go elsewhere.
  Chips funding will help secure our most critical supply chains. It 
will create thousands of well-paying jobs and boost our global 
competitiveness by providing made-in-America chips to our friends and 
allies around the world. So we have a big opportunity ahead of us but 
big risks in not acting as well, and success, I believe, 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 bill clerk proceeded to call the roll.
  Mr. TESTER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.