Senate to Vote on Semiconductor Bill Aimed at China Competition

Andrew ThornebrookeJuly 21, 2022

News Analysis

The U.S. Senate aims to pass legislation this week to boost the United States’ domestic semiconductor industry and improve competitiveness with China amid a global supply chain crisis.

“We need to move quickly,” said Senate Majority Leader Chuck Schumer (D-N.Y.) on July 18.

“Without these incentives from Congress, the capital investment required for expanding production is not economically viable in the United States, given other global alternatives.”

The legislation at hand is a compromise version of two bills that members of Congress have been working on for over a year, the purpose of which is to appropriate funding for the nation’s domestic semiconductor manufacturing ability.

A Matter of National Security

Semiconductors, which are used in the production of everything from personal computers to hypersonic missiles, have become a key point of anxiety in the last two years as a global supply chain crisis has wreaked havoc on the United States’ ability to obtain the chips.

“The semiconductor industry is not just any industry,” said Bonnie Glick, director of the Krach Institute for Tech Diplomacy at Purdue University. “It’s one that was developed in the United States and touches many of our other industries, including manufacturing, as well as the systems that are intrinsic to modern life.”

“Semiconductors are at the heart of technology and play a critical role in our national security, as they power defense systems and emerging technologies including artificial intelligence, 5G and next generation broadband, quantum computing, and hypersonic capabilities,” she said.

That reliance on semiconductors has become a problem for national security in the aftermath of COVID-19. In 2021, more than 60 percent of such chips were produced in Taiwan. Still, supply chain woes and related global resource shortages resulted in the nation’s inability to obtain enough chips to meet demand.

China has not been