February 24, 2022

How Congress Can Ensure CHIPS Act Funding Advances National Security Interests

By: Emily Kilcrease and Sarah Stewart

As Congress moves toward conference consideration of major China-related legislation, funding for domestic semiconductor manufacturing will feature prominently. And rightly so, as semiconductors, the brains of the modern world, support nearly every element of the 21st century economy. Given their importance, securing the United States’ supply of these chips is an economic and national security imperative. But as Congress leans into industrial policy, it has a responsibility to ensure that taxpayer dollars are spent strategically to advance U.S. interests, not amounting to a blank check untethered to U.S. strategic objectives. CHIPS Act investment must tilt the geopolitical scales strongly toward the U.S. side and, along with other proposals under consideration, advance U.S. leadership in the chips race vis-a-vis China.

Increased domestic production of chips is one important part of an overall strategy to mitigate these vulnerabilities.

The complex global distribution of the semiconductor value chain and the precipitous decline of semiconductor manufacturing capacity in the United States means that the United States is extremely vulnerable to supply shocks, as the recent shortages arising from pandemic and extreme weather events amply demonstrate. While geopolitical tensions have not yet been a driving factor in the supply chain disruptions, China’s intensifying ambition to indigenize its semiconductor sector and the extreme concentration of leading-edge chip production in Taiwan present significant security vulnerabilities. That’s where funding for domestic semiconductor manufacturing comes into play. Increased domestic production of chips is one important part of an overall strategy to mitigate these vulnerabilities.

Read the full article from Lawfare.

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