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Floor Speech
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Mr. CORNYN. Madam President, I want to express my gratitude to the Senator from Ohio for his excellent remarks and for his support getting us to the point we are today, which is on the cusp of a historic accomplishment--and that is to make sure that the supply lines of advanced semiconductors remains available to American businesses and, even more importantly, to our national security.
Now, 2 years ago, Senator Warner, the senior Senator from Vermont, and I introduced the CHIPS for America Act. It has been a long, strange trip till today.
I daresay at the time we introduced the bill, there were many people who didn't know the difference between chocolate chips and microchips. Frankly, that is an exaggeration, but the point is that most people are really unaware of the dependency of our economy and our national security and, frankly, just the quality of our life on access to these microcircuits known as semiconductors. And over time, the semiconductor manufacturers have been able to make them smaller and smaller and more and more powerful until your cell phone, which is essentially a minicomputer, contains thousands of these microchips. Again, whether you are talking about a laptop computer or a new car or a washing machine or just some desktop computer, all of them depend on access to these semiconductors.
As I said, Senator Warner and I introduced the bipartisan CHIPS for America Act 2 years ago. Eighteen months ago, this legislation became law; that was as part of the National Defense Authorization Act. Thirteen months ago, the U.S. Senate passed a bipartisan bill to fund the program. Unfortunately, as the Senator from Ohio mentioned, the House failed to respond to the bipartisan USICA, the U.S. Innovation and Competition Act, and sent over a partisan bill, which has delayed our consideration of this important legislation unnecessarily.
Today, I am optimistic that the Senate will follow up on its commitment to enact this chips funding into law before we break for the August recess. This afternoon we will take a procedural vote to kick- start consideration of the legislation. Of course, as we lead up to this important vote in debate, many of us have been talking about the size and shape of the bill on both sides of the aisle. And there is still some things that need to be decided, and the fate of the bill is not yet secure. Being the majority leader, Senator Schumer will ultimately be the one to determine what the size and shape of the bill will look like, but I am encouraged by where we stand.
This bill will not, however, be the Senate's U.S. Innovation and Competition Act or the USICA bill or the House's massive partisan America COMPETES Act. This will be a far more narrow bill that focuses on the core issue of semiconductor manufacturing. Semiconductor manufacturing is, as I said, the key to our economy and our national security. As it turns out, most of the manufacturing capacity has been built overseas, primarily in Asia, because it is significantly cheaper to build those manufacturing facilities there rather than here. I am not opposed to additional Commerce provisions, for example--that have already been voted on as part of USICA--being included, but anything else that is included by Senator Schumer must be bipartisan, and those decisions have to be made very quickly. The time for voting on this bill should not be delayed any further.
Over the last three decades, the United States has gone from making 37 percent of these microcircuits, or semiconductors--37 percent--to only about 12 percent now. When you look at the most advanced chips, the smallest and the most powerful, none of these are made in the United States--none. Now, Taiwan's Semiconductor, located in Taipei, Taiwan, has a great business model: American companies design the chips, and they make them. As I said, it is cheaper to make them in Asia than it is here in America, but post-COVID we have come to realize the vulnerability of our supply chains for virtually everything.
When you look at our dependency on the supply chain of these advanced chips and what it might mean to our country, well, it is shocking. The CEO of Micron, out of Idaho, has said there is a 35- to 45-percent cost gap between domestic and overseas production. Now, if you are talking about making toys or something like that or furniture items, it is great to have a cheaper alternative where that product is manufactured overseas rather than here in America. That is good for consumers as it makes things a lot more affordable, but when you are talking about a sole source for the most advanced semiconductors, that goes from being a convenience to a nightmare, and, of course, during the pandemic, we experienced a number of supply chain vulnerabilities. Now, as the economy around the world continues to expand, anybody who has tried to buy a car, a dishwasher, or a computer over the last couple of years has likely been impacted with higher costs or long delays or both.
As a matter of fact, due to the shortages of supply, that has necessarily driven the costs higher, which has further exacerbated inflation, but there is an even more important reason to get this bill done.
The chip shortage and our lack of domestic manufacturing capability is a huge national security risk. That is why the Secretaries of the Departments of Defense and Commerce sent a letter to Congress a few weeks ago, saying very clearly:
Funding the CHIPS Act is critical to our national defense.
That is why the Republican-led Senate passed the original bill and helped it become law during the previous administration. That is why I hope the current Congress will fund it with today's vote--or with, actually, this week's vote.
Whether it is advanced fighters, the fifth-generation stealth strike fighter, like the F-35; whether we are talking about quantum computing, the next generation of computing; or whether we are talking about missile defense systems or the Stinger or Javelin missiles that we have exported to Ukraine for them to defend themselves against Russian aggression, all of them depend on semiconductors. As a matter of fact, a single rocket interceptor used in Israel's Iron Dome, for example, contains more than 750 chips. An overreliance on other countries to produce the key components to our most vital defense assets is a huge and unacceptable risk.
As I said, that is why Senator Warner and I initially introduced the bill in June of 2020 and why it has received such strong bipartisan support.
Building a new foundry--or ``fab'' as they are sometimes called--is a huge undertaking and requires a massive investment. A single foundry can cost upward of $10 to $20 billion--$10 to $20 billion. Without some level of support from the government, these investments simply won't materialize, at least not in America. Other governments, as you have heard, have made similar investments in semiconductor manufacturing in trying to make sure that their supply chains are not vulnerable. Countries like China, South Korea, Taiwan, Singapore, Germany, and a number of others have included an over-$100 billion pledge to boost semiconductor manufacturing in the European Union alone. The United States simply cannot get left behind, and we can't keep dragging our feet.
It doesn't just take a lot of money to get these foundries up and running; it also takes time. Last year, I hosted a roundtable in Dallas, TX, to talk about the impact of the chip shortage with industry leaders. During our conversation, a Qorvo executive talked about how it can take years to receive all of the high-functioning equipment that is necessary to make semiconductors. That is why there has been such a big push in Congress to get this funding out the door.
Chip makers who have to make decisions about where and when to build their next manufacturing facilities need to know that these incentives are available for them to build those foundries here in America, and the window of that decision-making process is closing rapidly. If it closes--if we continue to drag our feet and not fund the chips bill-- they are going to pull their investments from new or expanded foundries in the United States and take them overseas. This isn't just a ``Chicken Little'' claim. Companies have put out the warning call, and I believe them.
One company called GlobalWafers is planning to build a new silicon wafer factory in Sherman, TX, which would create up to 1,500 new jobs and produce 1.2 million wafers a month. Silicon wafers are an essential component of semiconductors. Commerce Secretary Gina Raimondo said that the CEO told her that their plan to build this factory in Sherman, TX, is contingent on Congress passing the CHIPS Act. Unless the funding is approved by the August recess, which is rapidly approaching, the company will scrap its plans for that facility.
As you heard from our colleague from Ohio, the CEO of Intel expressed a similar sentiment for a planned Ohio facility. He said the company would expand chip production in Europe instead of in America if Congress fails to pass this funding.
Another company, NXP Semiconductors, is weighing new investments too. It is looking at expanding one of its factories in Austin, TX--a project that would cost, roughly, $2.6 billion. The company is planning to decide later this year whether to move forward with that investment or to take that investment to Europe or Asia.
In other words, there are real consequences on the line. If Congress passes this chips funding act in the coming days, we can shore up this domestic supply chain vulnerability, bring good jobs back to America, and protect our economic and national security, but if we fail to act or if we fail to act with dispatch, all of those benefits will evaporate, and all of those dangers will become our worst nightmare. Instead of here in America, those benefits from building those fabs will rain down on communities on the other side of the planet instead of here at home.
It has been more than a year and a half since the CHIPS Act became law, and we simply cannot afford to wait any longer. Every day that goes by creates additional risks. Unless Congress gets this job done in the coming days, these companies will simply go elsewhere.
Chips funding will help secure our most critical supply chains. It will create thousands of well-paying jobs and boost our global competitiveness by providing made-in-America chips to our friends and allies around the world. So we have a big opportunity ahead of us but big risks in not acting as well, and success, I believe, is our only option.
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