[Senate Report 117-109]
[From the U.S. Government Publishing Office]


                                                  Calendar No. 222

117th Congress}                                           { Report
                                 SENATE
  2d Session  }                                           { 117-109

======================================================================
 
                   SECURING SEMICONDUCTOR SUPPLY CHAINS 
                              ACT OF 2021

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   ON

                                 S. 3309

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                  May 17, 2022.--Ordered to be printed
                  
                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
                        WASHINGTON : 2022                     
          
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                    one hundred seventeenth congress
                             second session

                   MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota             ROGER WICKER, Mississippi
RICHARD BLUMENTHAL, Connecticut      JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii                 ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts         TED CRUZ, Texas
GARY PETERS, Michigan                DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin             JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois            DAN SULLIVAN, Alaska
JON TESTER, Montana                  MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona              TODD YOUNG, Indiana
JACKY ROSEN, Nevada                  MIKE LEE, Utah
BEN RAY LUJAN, New Mexico            RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado          SHELLEY MOORE CAPITO, West Virginia

RAPHAEL WARNOCK, Georgia             RICK SCOTT, Florida
                                     CYNTHIA LUMMIS, Wyoming
                                     
                       Lila Helms, Staff Director
                  John Keast, Minority Staff Director
                  
                  
                                                  Calendar No. 222

117th Congress}                                           { Report
                                 SENATE
  2d Session  }                                           { 117-109

======================================================================                       
         
            SECURING SEMICONDUCTOR SUPPLY CHAINS ACT OF 2021

                                _______
                                

                  May 17, 2022.--Ordered to be printed

                                _______
                                

      Ms. Cantwell, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 3309]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 3309) to require SelectUSA to 
coordinate with State-level economic development organizations 
to increase foreign direct investment in semiconductor-related 
manufacturing and production, having considered the same, 
reports favorably thereon with an amendment (in the nature of a 
substitute) and recommends that the bill (as amended) do pass.

                          PURPOSE OF THE BILL

    The purpose of S. 3309, the Securing Semiconductor Supply 
Chains Act of 2021, is to direct the Executive Director of the 
SelectUSA program of the Department of Commerce (Executive 
Director) to gather and analyze information for a report to 
Congress about leveraging foreign direct investment (FDI) to 
bolster domestic supply chains for semiconductors.

                          BACKGROUND AND NEEDS

    Semiconductors--also referred to as integrated circuits or 
chips--are essential to numerous goods and services that play a 
significant role in the Nation's economy, from farm equipment 
and cars\1\ to smartphones, computers, aviation, wireless 
communication, and more.\2\ A recent shortage of 
semiconductors, driven by a global pandemic and other factors, 
has threatened economic growth and countless jobs.\3\ These 
events exposed vulnerabilities in supply chains for 
semiconductors and highlighted the important role they play in 
the economy.\4\
---------------------------------------------------------------------------
    \1\Dan Crisler, ``Chip Shortages Make for `Frustrating' Environment 
for Vehicle and Ag Equipment Dealers,'' Omaha World-Herald, September 
30, 2021 (updated November 6, 2021) (https://omaha.com/news/state-and-
regional/chip-shortages-make-for-frustrating-environment-for-vehicle-
and-ag-equipment-dealers/article_70d7cdc2-1b0a-11ec-a5a8-
672f401c1196.html).
    \2\PricewaterhouseCoopers, The Internet of Things: The Next Growth 
Engine for the Semiconductor Industry, 5, 18, May 2015) (https://
www.pwc.com/gx/en/technology/publications/assets/pwc-iot-semicon-paper-
may-2015.pdf).
    \3\Daniel Howley, ``What the Chip Shortage Means for the US 
Economy,'' Yahoo! Finance, 
April 22, 2021 (https://news.yahoo.com/what-the-chip-shortage-means-
for-the-us-economy-152607880.html); see also Jack Ewing and Patricia 
Cohen, ``How Car Shortages Are Putting the World's Economy at Risk,'' 
The New York Times, November 2, 2021 (https://www.nytimes.com/2021/11/
02/business/car-shortage-global-economy.html).
    \4\Saif M. Khan et al., Center for Security and Emerging 
Technology, The Semiconductor Supply Chain: Assessing National 
Competitiveness, January 2021 (https://cset.georgetown.edu/wp-content/
uploads/The-Semiconductor-Supply-Chain-Issue-Brief.pdf).
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    Advances in semiconductor technologies are driving 
innovations that will shape the future of the global economy 
and military power, such as artificial intelligence, 5G 
wireless communication systems, and quantum computing.\5\ 
Ensuring that semiconductor supply chains can reliably fulfill 
the country's needs for semiconductors is necessary to the 
Nation's economic and national security.\6\
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    \5\FP Analytics, ``Semiconductors and the U.S.-China Innovation 
Race,'' Foreign Policy, February 16, 2021 (https://foreignpolicy.com/
2021/02/16/semiconductors-us-china-taiwan-technology-innovation-
competition/).
    \6\Ibid.
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    To that end, the Administration published a report in June 
2021 that analyzed supply chains for semiconductors, among 
other critical goods, and provided recommendations to make them 
more resilient.\7\ The report suggested that the SelectUSA 
program of the Department of Commerce could be leveraged ``to 
attract investment in semiconductor manufacturing supply 
chains.''\8\ The SelectUSA program helps foreign and U.S. 
businesses located abroad to invest in the United States by 
offering various research and counseling services, as well as 
by working with State-level economic development organizations 
(EDOs).\9\ With these capabilities, the Administration noted 
that the SelectUSA program is positioned to help strengthen the 
domestic semiconductor manufacturing ecosystem by fostering 
related investment in the United States.\10\
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    \7\Biden Administration, Executive Office of the President of the 
United States, Building Resilient Supply Chains, Revitalizing American 
Manufacturing, and Fostering Broad-Based Growth, June 2021 (https://
www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-
review-report.pdf).
    \8\Ibid. at 77.
    \9\Ibid.
    \10\Ibid. at 23.
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                          LEGISLATIVE HISTORY

    S. 3309 was introduced on December 2, 2021, by Senator 
Peters (for himself and Senator Scott of Florida) and was 
referred to the Committee on Commerce, Science, and 
Transportation of the Senate. Senator Blackburn cosponsored the 
bill on December 9, 2021. On December 15, 2021, the Committee 
met in open Executive Session and, by voice vote, ordered S. 
3309 reported favorably with an amendment (in the nature of a 
substitute).

                            ESTIMATED COSTS

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 27, 2022.
Hon. Maria Cantwell,
Chair, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Madam Chair: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3309, the Securing 
Semiconductor Supply Chains Act of 2021.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Hughes.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    S. 3309 would direct the Department of Commerce (DOC), 
through its SelectUSA program, to solicit comments from state 
economic development organizations about how to support foreign 
direct investment in semiconductor production. The bill also 
would require the department to report to the Congress on the 
comments and strategies that SelectUSA may implement to 
increase such investment.
    Using information from DOC, CBO expects the department 
would need two employees and six contractors ove the 2022-2024 
period to carry out the comment solicitation process and 
complete the required report. On that basis, CBO estimates that 
implementing S. 3309 would cost $4 million over the 2022-2026 
period; such spending would be subject to the availability of 
appropriated funds.
    The CBO staff contact for this estimate is David Hughes. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Director of Budget Analysis.

                      REGULATORY IMPACT STATEMENT

    Because S. 3309 does not create any new programs, the 
legislation will have no additional regulatory impact, and will 
result in no additional reporting requirements. The legislation 
will have no further effect on the number or types of 
individuals and businesses regulated, the economic impact of 
such regulation, the personal privacy of affected individuals, 
or the paperwork required from such individuals and businesses.

                   CONGRESSIONALLY DIRECTED SPENDING

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title.

    This section would provide that the bill may be cited as 
the ``Securing Semiconductor Supply Chains Act of 2021''.

Section 2. SelectUSA defined.

    This section defines the term ``SelectUSA'' to mean the 
SelectUSA program of the Department of Commerce established by 
Executive Order 13577.\11\
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    \11\Executive Order 13577, Federal Register, vol. 76, no. 118, 
35715-35717, June 20, 2011 (https://www.federalregister.gov/documents/
2011/06/20/2011-15443/establishment-of-the-selectusa-initiative).
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Section 3. Findings.

    This section provides congressional findings related to 
supply chains for semiconductors, noting the importance of 
semiconductors to the U.S. economy and the economic recovery, 
identifying areas that can benefit from further investment--
such as advanced manufacturing, packaging, and materials and 
equipment--and opportunities for FDI to help grow domestic 
manufacturing.

Section 4. Coordination with State-level economic development 
        organizations.

    This section would require the Executive Director to 
solicit comments from State-level EDOs about their efforts to 
boost FDI in domestic semiconductor-related production, among 
other relevant topics. These comments would serve to develop 
recommendations to SelectUSA on increasing FDI in domestic 
semiconductor-related production, either independently or in 
partnership with EDOs.
    Both the Federal Government and outside experts have raised 
concerns that agreements related to foreign investment can 
enable foreign individuals to ``exploit ownership in U.S. 
companies by misappropriating sensitive data and information in 
ways that might be detrimental to US national security.''\12\ 
Congress has, therefore, directed the Chairman of the Committee 
on Foreign Investment in the United States to work with allies 
and partners to protect U.S. national security interests.\13\ 
This section further specifies that the Executive Director 
should leverage EDO feedback to develop recommendations on 
working with U.S. allies or partners of the United States--
which could include semiconductor manufacturing leaders such as 
the Netherlands or South Korea--to ensure that U.S. attempts to 
increase FDI do not advantage foreign adversaries. The term 
``foreign adversaries'' has the same meaning as in section 
8(c)(2) of the Secure and Trusted Communications Networks Act 
of 2019.\14\
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    \12\Deloitte, Committee on Foreign Investment in the United States 
(CFIUS) Monitoring and Assessment Services, 1, 2021 (https://
www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-committee-
on-foreign-investment-in-the-us-cfius-monitoring-and-assessment-
services-2021.pdf).
    \13\Foreign Investment Risk Review Modernization Act of 2018, 
Public Law 115-232, sections 1701-28, 132 Stat. 2174.
    \14\Secure and Trusted Communications Networks Act of 2019, section 
8(c)(2), 47 U.S.C. 1607(c)(2) (defining the term ``foreign adversary'' 
to mean ``any foreign government or foreign nongovernment person 
engaged in a long-term pattern or serious instances of conduct 
significantly adverse to the national security of the United States or 
security and safety of United States persons'').
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Section 5. Report on increasing foreign direct investment in 
        semiconductor-related manufacturing and production.

    This section would require the Executive Director, in 
coordination with the Federal Interagency Investment Working 
Group,\15\ to submit a report about semiconductor supply chains 
to the Committee on Commerce, Science, and Transportation of 
the Senate and the Committee on Energy and Commerce of the 
House of Representatives. This section would direct the 
Executive Director to narrow the report based on comments 
received from EDOs pursuant to section 4, to describe related 
work SelectUSA is conducting, and to assess strategies--at the 
Executive Director's discretion--that SelectUSA could implement 
to increase investment that helps secure U.S. semiconductor 
supply chains for the United States.
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    \15\Executive Order 13577, Federal Register, vol. 76, no. 118, 
35715-35717, June 20, 2011 (https://www.federalregister.gov/documents/
2011/06/20/2011-15443/establishment-of-the-selectusa-initiative) 
(establishing the Federal Interagency Investment Working Group 
consisting of senior officials from several agencies tasked with 
coordinating activities to promote business investment among other 
related functions).
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                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.

                                  [all]