Iowa farmers’ can see their new farm equipment idle in Vermeer’s crowded parking lot, but they can’t take it to field. Small businesses’ electronics inventories are indefinitely postponed. And families are on long waitlist for a new family vehicle. The supply chain failure: no chips for advanced electronics.
The pain does not stop there. The semiconductor shortage is a direct threat to America’s economy and national security.
The most advanced semiconductors, used in everything from smartphones to military weapons, are produced by a single company in Taiwan, known as TSMC, making about 90% for the global market. America’s factories make none, the New York Times reported.
Not long ago, the U.S. was the world’s leader in semiconductor manufacturing. American policies prioritized domestic manufacturing as a matter of strategy to win the Cold War. But after the fall of communism, U.S. federal investments in this increasingly important sector dwindled, in favor of cheaper off-shore products. As a result, our domestic manufacturing capacity diminished, from 37% of global supply in 1990 to 12% today, mainly in standard chips.
Congress can act to pass legislation returning critical domestic production.
Washington Post columnist David Ignatius noted that when “a bipartisan group of senators first proposed the semiconductor legislation more than two years ago, they described it as an urgent fix for a big strategic problem.” Public-private partnering between federal research and corporate innovation must be able to compete with China’s totalitarian state. With our eroding advantage over China, that need was a key issue on which Republicans and Democrats agreed.
Painfully, nothing happened. Ignatius wrote that House Democrats “dithered and delayed” on the semiconductor plan for eight months. Creating a huge, 107-member conference committee, the House moved at glacial, not microchip, speed. “Because members knew that it was likely to pass, they attached pet projects, creating a ‘Christmas tree’ effect similar to what happens with defense authorization bills. (Joe) Biden and Speaker Nancy Pelosi should have stopped this process, but they didn’t,” Ignatius wrote.
Americans expect better. First, Congress can return to the original bipartisan version of the bill to prioritize U.S. manufactured semiconductors made in America. Second, public-private investments in new semiconductor development can create jobs at home and secure U.S. technology independence.
Ultimately, Congress bears the burden to bolster America’s semiconductor manufacturing. That’s no small task.
Semiconductors are the world’s most capital-intensive industry. Facilities often require an investment of tens of billions before bringing a single chip to market. U.S.-based Intel agreed to expand a planned $20 billion fabricating plant to $100 billion if it could get congressional support.
The failure of Congress to act is not shared by America’s strategic competitors. In 2020, China expanded its semiconductor industry by 30%. This was the fruit of an ongoing investment of more than $150 billion beginning in 2014. Experts now believe China is positioned to be the global champion in semiconductor manufacturing by the end of the 2030.
China has more than doubled sales to Russia year over year, sending over $50 million from January through May. Increased exports make Russia a client-state for Chinese electronics and weapons systems.
Worse, if China were to invade Taiwan, the world’s primary chip producer, the U.S. military’s access to semiconductors would be severed, and America’s service men and women would be at risk of being overmatched by our country’s main rival in Beijing.
Americans need our semiconductors to be built here at home.
Iowa, and America, needs Congress to do its duty.
Zach Nunn served as director of cybersecurity for the White House National Security Council from 2011 to 2013, and he helped lead Iowa’s broadband and technology legislation as a state senator from 2014 to present. He is running for Congress in Iowa’s 3rd District.