[Congressional Record Volume 169, Number 49 (Thursday, March 16, 2023)]
[Senate]
[Pages S816-S818]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Semiconductors
Mr. CORNYN. Mr. President, over the past few decades, the United
States has experienced a steady drop in domestic semiconductor
manufacturing. Now, I guess we all might be forgiven for not being
experts in what advanced microcircuits are all about, but the truth is
these microcircuits, or semiconductors, are part of our everyday lives
in ways that perhaps we don't fully appreciate. Everything from your
smartphone to the most advanced weapons that we are providing to
Ukraine to defeat Russian aggression, to the Joint Strike Fighter, the
F-35--all of these require a large number of these mini-circuit
processors, or semiconductors.
Well, over these last few decades, we have gone from producing 37
percent of the world's chips in 1990 to just 12 percent today. In other
words, we are more dependent than ever on supply chains of
semiconductors in order to keep our economy going and to defend
ourselves from a national security perspective.
This, obviously, is a concerning trend, and one of the things we have
learned about during COVID is this idea of globalization, that just
because somebody can make something cheaper--in China, let's say--than
in the United States, that that answered all the questions, that that
checked all the boxes.
Well, you might say the same thing about Europe's dependency on
Russian oil and gas when, once Mr. Putin decided to invade Ukraine,
they realized they were the captive of the Russian Federation when it
came to their basic energy needs. Well, the same thing is happening in
other places, including semiconductors.
Thirty years ago, China manufactured none of the world's chips, but
today it commands nearly a quarter of the global market. And just off
the
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coast of mainland China, you will find a global powerhouse when it
comes to chip making: Taiwan. Taiwan manufactures 92 percent of the
most advanced semiconductors in the world, and given China's aggressive
threats against Taiwan, that is a blinking red light.
But just like the Europeans found that it is going to take a while
for them to diversify their energy sources from Russia, it is going to
take a while for us to get diversity in sources so that we don't only
rely on imported chips from the Far East. For a long time, this has
been recognized as a problem and, of course, people said: Well,
something needs to be done. But that ``something'' wasn't at the top of
everyone's priority list.
But then, of course, the pandemic hit, as I said, and we found
ourselves dependent on everything from masks, or personal protective
equipment, which was all made in China, and we couldn't get it when we
needed it when the pandemic hit. And now we have become more aware of
our vulnerabilities when it comes to these supply chains.
My constituents in Texas and, I am sure, those in Michigan and New
Jersey and elsewhere were shocked to see empty car lots, for example,
because of backorders of semiconductors. Because of the disrupted
supply chain, they couldn't even make cars, which are, of course, more
and more dependent upon these microelectronics. Suddenly, consumers who
have never needed to know what a semiconductor was found themselves
impacted by this global shortage.
So, in many ways, this was a wake-up call that we didn't even know we
needed, and it is not the last. If you start looking around at other
things like rare Earth elements, things like the active ingredients in
pharmaceuticals, we are dependent on China to produce those, and that
is another vulnerability we need to address.
But if China were to act on its threats to invade Taiwan and block
the world's access to these advanced semiconductors, empty car lots
would be the least of our worries.
Without chips, we wouldn't be able to maintain the energy grid or
communications systems. We can't build rocket interceptors, or, as I
said, F-35s for our military. And our national security missions would
take a hit, both on the ground and in cyber space. So, clearly, the
time had come to make advanced chip manufacturing in America a top
priority.
In June of 2020, Senator Warner--the senior Senator from Virginia--
and I introduced the CHIPS for America Act to incentivize chipmakers to
build or expand their operations here in America. Given the
significance of this effort to our national security, the Senate
adopted this bill as an amendment to the National Defense Authorization
Act with overwhelming bipartisan support--a vote of 96 to 4. Six months
after it was introduced, the CHIPS for America Act became law. And a
year and a half later, it was fully funded by the bipartisan CHIPS and
Science Act.
So it took a little over 2 years from the time Senator Warner and I
introduced the legislation until it was finally authorized. And it is
going to take another couple of years before the funding that we
provided is granted by the Commerce Department to incentivize that
manufacturing here.
But as in so many other areas--permitting snafus, bureaucratic
delays--it is going to be a while before we can totally relieve our
dependence on imported semiconductor supply chains. This ought to be a
wakeup call, as I said, again, to our other dependencies, one that had
been nurtured by the People's Republic of China and where they have
actively undermined development of diverse alternatives in other parts
of the world, from friendly countries and from the United States
itself.
Well, 2 years is a long time from a bill being filed until it becomes
law. But that is actually not an unusual pace. It takes a while for
this body to act. And we are not known for our speed. So the fact that
we were able to stand up the CHIPS Program and fully fund it officially
shows how critical this investment is and how a bipartisan consensus
believed that time was not on our side, and we needed to act without
delay.
Well, despite bipartisan support for the CHIPS Program, it has not
been immune from criticism. Some have criticized it as industrial
policy, even comparing it to the Chinese Communist Party's intervention
in the China economy. But there is a big difference between propping up
favored industries in order to protect your domestic industries, as
China does. There is a big difference between that and safeguarding an
essential supply chain that is vital to our economy and our national
security.
One of Congress's most fundamental responsibilities is to provide for
the common defense. Traditionally, it involves timely Defense bills and
appropriations, but we no longer live in a world where those tasks
alone can cut it.
Authorizing the manufacture and purchase of new F-35s, the most
advanced stealth Joint Strike Fighter in America's Air Force--
authorizing that or appropriating the money for that is meaningless if
we don't have the electronics we need in order to manufacture them,
including semiconductors. Supporting the development of artificial
intelligence or quantum computing or 5G is useless if we can't get
access to the technology we need.
So we no longer have the luxury of endless supplies of chips. And we
have to adjust accordingly. And the CHIPS Program is just one way that
we have done that.
From the beginning of this process, I have had the pleasure of
working closely with Commerce Secretary Gina Raimondo to ensure
Congress and the administration are on the same page. And by and large,
we are. I congratulate Secretary Raimondo for the great work she and
her team at the Commerce Department have done. And they have been good
partners in the actual passage of the CHIPS and Science Act.
But I am concerned--and I have communicated that to her--about some
of the components of the application guidance the Commerce Department
released last month. The Department outlined the application process
from eligibility to timelines. It provided details about the types of
incentives available and the way they could be used. And it laid out
extensive information applicants must provide; for example, a detailed
financial model for proposed projects and clear execution plans.
So far so good. The Department needs to understand the viability and
lasting impact of each of these projects before awarding these
financial incentives--again, to bringing that manufacturing back to
America's shores. That is how we ensure each project will benefit our
national security, which was the main purpose of the legislation.
But Commerce laid out additional requirements that have nothing to do
with that goal or congressional intent. One example is the childcare
mandate. So who could be against a childcare mandate? Well, my fear is
that this is just the beginning of unauthorized additional requirements
that the Biden administration is going to impose for people to be able
to compete for the grant funding.
The Department of Commerce said it requires applicants who request
funding over specific amounts to provide a plan for access to
childcare. These requirements were not in the statute. That wasn't even
part of our congressional debate.
And as a practical matter, I am pretty confident that these
sophisticated companies are going to provide a generous package of
incentives to their future workforce, including, probably, childcare.
But even the New York Times, when they saw these extra requirements,
described these strings as ``ambitious and unusual.'' If a company
wants to offer childcare to its employees, if it needs to do so in
order to compete for the kind of workforce that it wants, that is
great, and many semiconductor companies already do so.
The market for highly skilled employees is extremely competitive, and
companies recognize that they need to offer benefits to attract the
best candidates. That is the beauty of the free market.
But if the Commerce Department wants to consider that information
when we are reviewing applications, that is fine. But there is a big
difference between taking it into consideration and mandating it.
We know that some of the debate here on Capitol Hill about
childcare--we have been down this road before--some in this Chamber
would like to
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outlaw faith-based organizations from providing that childcare or
require that if they are going to take the Federal money, that they are
going to have to hire a workforce that doesn't believe in the same
things they do.
That is how we go from what seems to be a relatively innocuous
requirement into big trouble and into the executive branch trying to
legislate new requirements that are not part of the underlying
legislation.
Recent reporting indicates that companies of all types are preparing
to make the play for CHIPS funding. This isn't limited to chips
manufacturers. We are talking to every industry under the Sun--so-
called ecosystem built around these fabs or manufacturing facilities.
The director of general economics at the Cato Institute explained why
companies that don't make chips could be making a play for funding.
Well, for one thing, I think it should be obvious that people are
attracted to the opportunity of qualifying for these grants for this
funding. But the director of general economics at Cato pointed to the
Commerce Department's unrelated requirements as a suggestion that the
administration isn't prioritizing national security. In other words,
this should not be a Trojan horse to pass other policy priorities under
the guise of protecting our national security.
And we don't want other, perhaps even more concerning, requirements
to be added which were not part of the legislation that Congress passed
or part of legislative intent.
Companies that do not manufacture chips now believe they have a shot
at funding as long as they meet the other unrelated requirements. I
want to be absolutely clear that that cannot be the case. In order for
the CHIPS Program to succeed--in order to protect our economy and our
national security--this needs to be a merit-based application process,
with no additional requirements imposed as a condition to receive these
grants that was certainly not part of legislative intent or even the
debate here in Congress. It should not be used as a Trojan horse to get
other policy priorities actually implemented when Congress had no such
intent.
So these decisions to make these grants should not depend on
relationships with labor unions or any other unrelated factors. It
should be based solely on how each project will strengthen our national
security and shore up this vulnerable supply chain.
We can't be in a situation where applicants that provide free
childcare are favored over those who will do more to strengthen our
national security. Again, that is fine if these companies want to do
so. And I dare say many, if not all of them, will anyway. But it is a
beginning that is concerning because this is a slippery slope to try to
shoehorn other policy priorities into something which will actually
distract the Commerce Department and the U.S. Government from doing
what needs to be done when it comes to semiconductor manufacturing.
The CHIPS Program received strong bipartisan support and should
remain far above the political fray. The ultimate goal is to boost
domestic chip manufacturing, and I am glad to say we are beginning to
move in the right direction.
Samsung from South Korea, Texas Instruments, and GlobiTech are
expanding their footprint in Texas. Taiwanese Semiconductor
Manufacturing Company is growing its presence in Arizona; Intel is
putting down roots in Ohio; and Micron is expanding in New York. These
are just a few of the announcements that have been made so far, and I
expect more to come now that the CHIPS Program is up and running.
Texas has already been a leader in the semiconductor industry. And we
are cementing that reputation with the addition of new and expanded
chip fabs.
Gov. Greg Abbott is pushing to attract even more chip manufacturers
to the Lone Star State. He has been working with leaders in the Texas
Legislature this session, including Representative Greg Bonnen and
Senator Joan Huffman, to help bring new semiconductor businesses to
Texas.
The Texas Legislature recently introduced the Texas CHIPS Act, which
would support all chip-related activity in the State--from research and
development to design and manufacturing.
I appreciate their leadership on this front, and I am eager to see
the positive impact of the chips on communities all across our State
and, indeed, all across our Nation.
These are just a few of the investments that will support jobs, our
economy, and our national security. The CHIPS Program is key to that
success, and I hope the administration will avoid attaching
controversial and additional requirements that could imperil or impede
its success.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. BOOKER. Mr. President, I would like to ask consent--I know we
have an order to vote at 1:45--to speak for about 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. BOOKER pertaining to the introduction of S. 850
and S. 851 are printed in today's Record under ``Statements on
Introduced Bills and Joint Resolutions.'')