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Floor Speech

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Mr. CORNYN. Mr. President, the business before the Senate is a critical undertaking to shore up our vulnerability to imported microcircuits, otherwise known as semiconductors. You might wonder why this is so important if you haven't been following the debate over the last couple of years.

While this legislation has taken many names, it began as the CHIPS for America Act in June of 2020, which established a new program to incentivize manufacturers of these tiny microcircuits, known as semiconductors, to set up shop here in the United States.

We have tried to fund the program at different times through the Endless Frontier Act; the U.S. Innovation and Competition Act, sometimes called USICA; the America COMPETES Act; the Make It in America Act. But no matter what the title is or whatever you call it, the purpose is to eliminate this unacceptable risk that somehow--due to pandemic, due to military conflict, due to natural disaster--our access to the most advanced semiconductors on the planet would be cut off, with devastating consequences to the U.S. economy and our national security.

I know some people wonder, Why should the Federal taxpayer provide financial incentives to semiconductor manufacturing? And that is a perfectly good question. The reason is, we are in a competition with countries all around the world that are providing incentives to build these necessary and essential facilities in their country, and if we don't participate in this competition, we will end up maintaining our dependency entirely on semiconductors imported into the United States. We saw big investments being made in other countries--China, the EU, Germany, France. A number of different countries want this manufacturing capability in their country because they understand its importance to their economy and security.

Now, you might wonder, Why is it necessary? Well, there is a reason-- an economic reason--why these semiconductor manufacturers are almost all based in Asia. The overwhelming majority are made in Taiwan, and that is because it costs 30 percent less to build these facilities in Asia than it does here in the United States.

But COVID-19 exposed a lot of vulnerabilities of supply chains, whether it is PPE--personal protective equipment--or semiconductors, and this idea that just because somebody could build something cheaper somewhere else, that checked all the boxes. It does not check all the boxes. And there are some things we must have access to, and one is a secure source of these microcircuits that run everything from your cell phone to the F-35 Joint Strike Fighter. We know that semiconductors will get more and more important as the world competes to come up with smaller and more powerful semiconductor chips to operate everything from computers to our weapons systems.

When the pandemic hit, the supply chain vulnerability was demonstrated by empty car lots, backordered electronics, higher prices, contributing to inflation. Consumers who never needed to know what a semiconductor was found themselves impacted by this disruption.

My State is home to companies across a full range of industries that have been impacted, from consumer electronics to defense companies.

Last spring, an executive from Toyota told me that when he first started with the company, he could count the number of chips in a given vehicle on two hands. That certainly is not the case now, with almost autonomous vehicles and certainly with all the sensors that have made driving a lot safer and a lot more convenient added to new cars. Think about the high-tech features in our cars--navigation systems, Bluetooth, automatic braking, backup cameras, and parking sensors. That is on top of standard functions like power steering, air-conditioning, and window wipers. Today, some cars use as many as 1,000 semiconductor chips.

So the pandemic of COVID-19 demonstrated our vulnerability to our supply chains that made getting so many semiconductors impossible.

This wasn't just a problem for automakers; virtually every industry was impacted. In many ways, the global chip shortage served as a wake- up call--certainly to me and I believe other Members of Congress and the Senate who voted consistently to eliminate this vulnerability in our supply chains. It forced us to recognize the vulnerability of that supply chain and then to do something about it, which we are in the process of doing.

As bad as the chip-related shortages have been in the last 2 years, they pale in comparison to what could be coming if we don't act.

As I said, the vast majority of the world's chips are made in Asia, with the bulk coming from Taiwan. Sixty-three percent of the advanced semiconductors in the world are made in Taiwan. Even more concerning is that 92 percent of the world's most advanced semiconductors come from that country. So 62 percent--63 percent of semiconductors come from Taiwan, but 92 percent of the most advanced, the most powerful, the smallest semiconductors come from that same place. None, zero, zip, nada are made in America. None.

Taiwanese semiconductor firms make the chips used in our military's Joint Strike Fighter, the F-35, artificial intelligence, and other military-grade devices.

Now, if you have been paying attention to what President Xi and the People's Republic of China have been saying about Taiwan, they are saying they are going to unify the PRC with Taiwan either peacefully or by military action.

Again, I believe the risk of pandemic, natural disaster, or military intervention makes this risk simply unacceptable.

Last fall, I led a congressional delegation to visit Indochina, the INDOPACOM area of operations, to learn more about the threat of Chinese aggression when it comes to Taiwan. One of the leaders we met with was the commander of the Indo-Pacific Command, located in Hawaii, who described the current power dynamic rather succinctly. He said it is not a question of if China invades Taiwan but when.

We even have a rough idea of when that could happen. President Xi has made no secret of his desire to unify Taiwan with the mainland, saying he wants to be ready to do that by 2027, just 5 years from now. But, as we have learned from Putin's invasion of Ukraine, when one person makes a decision, you can't depend on any particular timeline because it could happen in the blink of an eye.

It is tough to overestimate the impact this lack of access to these advanced semiconductors would have on the United States and our allies. To be sure, our cars, televisions, refrigerators, and washing machines would be impacted, but that is only the beginning. Those would be mere inconveniences. How would we manufacture Javelin missiles that are used in Ukraine? Well, we couldn't because they all run on semiconductors. There is the Stinger that is being used so effectively by the Ukrainians to go after Russian tanks invading Ukraine. The Joint Strike Fighter, the F-35, our most advanced, fifth-generation, stealth aircraft, is chock-full of semiconductors that would be unavailable if our access was cut off for some reason.

Then just think about our critical infrastructure. Think about cell towers. Think about the energy grid. Where would we get the chips that are needed for modern farming equipment? Just as cars have become more and more automated, so have tractors and other farming equipment.

What would we do for the chips that we need to treat water to make sure it is clean and easily available?

So these aren't problems just for consumers; it is a major national security vulnerability.

Back in 1980, President Jimmy Carter gave his State of the Union Address in which he spoke about the instability of the Persian Gulf and Soviet threats to the movement of oil through the Strait of Hormuz. That was back in the days when we depended almost entirely on imported oil into the United States. But Jimmy Carter said in 1980 that any attempt to gain control of the Strait of Hormuz and to block access to that essential energy source, he said, would be ``an assault on the vital interests of the United States of America.'' That would be a declaration of war.

I think the same argument applies to semiconductors today. In fact, some people have called semiconductors the new oil because it is so essential to our way of life, to our economy, and our security.

Just as the Soviets could have blocked the Strait of Hormuz and choked off the global oil supply back in 1980, the People's Republic of China could seize Taiwan's supply of chips and starve the rest of the world. Will they go into the ventilators and the other lifesaving medical equipment or provide homes with clean drinking water? These are important questions that many of us have been asking and looking to try to find ways to mitigate, if not to eliminate, our dependency on imported semiconductors.

So funding this program in this bill currently before the Senate will shore up domestic chip manufacturing to make sure that we meet the needs of our most critical industries. It would deliver economic benefits to our communities through new investments and jobs. It will strengthen our national security by providing chips that can make their way into markets around the world. It will ensure that we have a reliable supply of chips so we can outinnovate and outcompete any and every adversary, and that is a point worth stressing.

We know we are in competition with the People's Republic of China, but the way we will beat them is to outcompete them. The only way we will do that is with access to the most advanced electronics, including semiconductors, that are made anywhere on the planet, and we need to make them here in America so there can be trusted supply chains and readily available.

So I appreciate all of our colleagues who supported this legislation for the long and winding journey that has brought us here today, and I hope this bill will pass the Senate and the House next week and finally make its way to the President's desk.

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