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Floor Speech

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Mr. CORNYN. Mr. President, over the past few decades, the United States has experienced a steady drop in domestic semiconductor manufacturing. Now, I guess we all might be forgiven for not being experts in what advanced microcircuits are all about, but the truth is these microcircuits, or semiconductors, are part of our everyday lives in ways that perhaps we don't fully appreciate. Everything from your smartphone to the most advanced weapons that we are providing to Ukraine to defeat Russian aggression, to the Joint Strike Fighter, the F-35--all of these require a large number of these mini-circuit processors, or semiconductors.

Well, over these last few decades, we have gone from producing 37 percent of the world's chips in 1990 to just 12 percent today. In other words, we are more dependent than ever on supply chains of semiconductors in order to keep our economy going and to defend ourselves from a national security perspective.

This, obviously, is a concerning trend, and one of the things we have learned about during COVID is this idea of globalization, that just because somebody can make something cheaper--in China, let's say--than in the United States, that that answered all the questions, that that checked all the boxes.

Well, you might say the same thing about Europe's dependency on Russian oil and gas when, once Mr. Putin decided to invade Ukraine, they realized they were the captive of the Russian Federation when it came to their basic energy needs. Well, the same thing is happening in other places, including semiconductors.

Thirty years ago, China manufactured none of the world's chips, but today it commands nearly a quarter of the global market. And just off the coast of mainland China, you will find a global powerhouse when it comes to chip making: Taiwan. Taiwan manufactures 92 percent of the most advanced semiconductors in the world, and given China's aggressive threats against Taiwan, that is a blinking red light.

But just like the Europeans found that it is going to take a while for them to diversify their energy sources from Russia, it is going to take a while for us to get diversity in sources so that we don't only rely on imported chips from the Far East. For a long time, this has been recognized as a problem and, of course, people said: Well, something needs to be done. But that ``something'' wasn't at the top of everyone's priority list.

But then, of course, the pandemic hit, as I said, and we found ourselves dependent on everything from masks, or personal protective equipment, which was all made in China, and we couldn't get it when we needed it when the pandemic hit. And now we have become more aware of our vulnerabilities when it comes to these supply chains.

My constituents in Texas and, I am sure, those in Michigan and New Jersey and elsewhere were shocked to see empty car lots, for example, because of backorders of semiconductors. Because of the disrupted supply chain, they couldn't even make cars, which are, of course, more and more dependent upon these microelectronics. Suddenly, consumers who have never needed to know what a semiconductor was found themselves impacted by this global shortage.

So, in many ways, this was a wake-up call that we didn't even know we needed, and it is not the last. If you start looking around at other things like rare Earth elements, things like the active ingredients in pharmaceuticals, we are dependent on China to produce those, and that is another vulnerability we need to address.

But if China were to act on its threats to invade Taiwan and block the world's access to these advanced semiconductors, empty car lots would be the least of our worries.

Without chips, we wouldn't be able to maintain the energy grid or communications systems. We can't build rocket interceptors, or, as I said, F-35s for our military. And our national security missions would take a hit, both on the ground and in cyber space. So, clearly, the time had come to make advanced chip manufacturing in America a top priority.

In June of 2020, Senator Warner--the senior Senator from Virginia-- and I introduced the CHIPS for America Act to incentivize chipmakers to build or expand their operations here in America. Given the significance of this effort to our national security, the Senate adopted this bill as an amendment to the National Defense Authorization Act with overwhelming bipartisan support--a vote of 96 to 4. Six months after it was introduced, the CHIPS for America Act became law. And a year and a half later, it was fully funded by the bipartisan CHIPS and Science Act.

So it took a little over 2 years from the time Senator Warner and I introduced the legislation until it was finally authorized. And it is going to take another couple of years before the funding that we provided is granted by the Commerce Department to incentivize that manufacturing here.

But as in so many other areas--permitting snafus, bureaucratic delays--it is going to be a while before we can totally relieve our dependence on imported semiconductor supply chains. This ought to be a wakeup call, as I said, again, to our other dependencies, one that had been nurtured by the People's Republic of China and where they have actively undermined development of diverse alternatives in other parts of the world, from friendly countries and from the United States itself.

Well, 2 years is a long time from a bill being filed until it becomes law. But that is actually not an unusual pace. It takes a while for this body to act. And we are not known for our speed. So the fact that we were able to stand up the CHIPS Program and fully fund it officially shows how critical this investment is and how a bipartisan consensus believed that time was not on our side, and we needed to act without delay.

Well, despite bipartisan support for the CHIPS Program, it has not been immune from criticism. Some have criticized it as industrial policy, even comparing it to the Chinese Communist Party's intervention in the China economy. But there is a big difference between propping up favored industries in order to protect your domestic industries, as China does. There is a big difference between that and safeguarding an essential supply chain that is vital to our economy and our national security.

One of Congress's most fundamental responsibilities is to provide for the common defense. Traditionally, it involves timely Defense bills and appropriations, but we no longer live in a world where those tasks alone can cut it.

Authorizing the manufacture and purchase of new F-35s, the most advanced stealth Joint Strike Fighter in America's Air Force-- authorizing that or appropriating the money for that is meaningless if we don't have the electronics we need in order to manufacture them, including semiconductors. Supporting the development of artificial intelligence or quantum computing or 5G is useless if we can't get access to the technology we need.

So we no longer have the luxury of endless supplies of chips. And we have to adjust accordingly. And the CHIPS Program is just one way that we have done that.

From the beginning of this process, I have had the pleasure of working closely with Commerce Secretary Gina Raimondo to ensure Congress and the administration are on the same page. And by and large, we are. I congratulate Secretary Raimondo for the great work she and her team at the Commerce Department have done. And they have been good partners in the actual passage of the CHIPS and Science Act.

But I am concerned--and I have communicated that to her--about some of the components of the application guidance the Commerce Department released last month. The Department outlined the application process from eligibility to timelines. It provided details about the types of incentives available and the way they could be used. And it laid out extensive information applicants must provide; for example, a detailed financial model for proposed projects and clear execution plans.

So far so good. The Department needs to understand the viability and lasting impact of each of these projects before awarding these financial incentives--again, to bringing that manufacturing back to America's shores. That is how we ensure each project will benefit our national security, which was the main purpose of the legislation.

But Commerce laid out additional requirements that have nothing to do with that goal or congressional intent. One example is the childcare mandate. So who could be against a childcare mandate? Well, my fear is that this is just the beginning of unauthorized additional requirements that the Biden administration is going to impose for people to be able to compete for the grant funding.

The Department of Commerce said it requires applicants who request funding over specific amounts to provide a plan for access to childcare. These requirements were not in the statute. That wasn't even part of our congressional debate.

And as a practical matter, I am pretty confident that these sophisticated companies are going to provide a generous package of incentives to their future workforce, including, probably, childcare.

But even the New York Times, when they saw these extra requirements, described these strings as ``ambitious and unusual.'' If a company wants to offer childcare to its employees, if it needs to do so in order to compete for the kind of workforce that it wants, that is great, and many semiconductor companies already do so.

The market for highly skilled employees is extremely competitive, and companies recognize that they need to offer benefits to attract the best candidates. That is the beauty of the free market.

But if the Commerce Department wants to consider that information when we are reviewing applications, that is fine. But there is a big difference between taking it into consideration and mandating it.

We know that some of the debate here on Capitol Hill about childcare--we have been down this road before--some in this Chamber would like to outlaw faith-based organizations from providing that childcare or require that if they are going to take the Federal money, that they are going to have to hire a workforce that doesn't believe in the same things they do.

That is how we go from what seems to be a relatively innocuous requirement into big trouble and into the executive branch trying to legislate new requirements that are not part of the underlying legislation.

Recent reporting indicates that companies of all types are preparing to make the play for CHIPS funding. This isn't limited to chips manufacturers. We are talking to every industry under the Sun--so- called ecosystem built around these fabs or manufacturing facilities.

The director of general economics at the Cato Institute explained why companies that don't make chips could be making a play for funding. Well, for one thing, I think it should be obvious that people are attracted to the opportunity of qualifying for these grants for this funding. But the director of general economics at Cato pointed to the Commerce Department's unrelated requirements as a suggestion that the administration isn't prioritizing national security. In other words, this should not be a Trojan horse to pass other policy priorities under the guise of protecting our national security.

And we don't want other, perhaps even more concerning, requirements to be added which were not part of the legislation that Congress passed or part of legislative intent.

Companies that do not manufacture chips now believe they have a shot at funding as long as they meet the other unrelated requirements. I want to be absolutely clear that that cannot be the case. In order for the CHIPS Program to succeed--in order to protect our economy and our national security--this needs to be a merit-based application process, with no additional requirements imposed as a condition to receive these grants that was certainly not part of legislative intent or even the debate here in Congress. It should not be used as a Trojan horse to get other policy priorities actually implemented when Congress had no such intent.

So these decisions to make these grants should not depend on relationships with labor unions or any other unrelated factors. It should be based solely on how each project will strengthen our national security and shore up this vulnerable supply chain.

We can't be in a situation where applicants that provide free childcare are favored over those who will do more to strengthen our national security. Again, that is fine if these companies want to do so. And I dare say many, if not all of them, will anyway. But it is a beginning that is concerning because this is a slippery slope to try to shoehorn other policy priorities into something which will actually distract the Commerce Department and the U.S. Government from doing what needs to be done when it comes to semiconductor manufacturing.

The CHIPS Program received strong bipartisan support and should remain far above the political fray. The ultimate goal is to boost domestic chip manufacturing, and I am glad to say we are beginning to move in the right direction.

Samsung from South Korea, Texas Instruments, and GlobiTech are expanding their footprint in Texas. Taiwanese Semiconductor Manufacturing Company is growing its presence in Arizona; Intel is putting down roots in Ohio; and Micron is expanding in New York. These are just a few of the announcements that have been made so far, and I expect more to come now that the CHIPS Program is up and running.

Texas has already been a leader in the semiconductor industry. And we are cementing that reputation with the addition of new and expanded chip fabs.

Gov. Greg Abbott is pushing to attract even more chip manufacturers to the Lone Star State. He has been working with leaders in the Texas Legislature this session, including Representative Greg Bonnen and Senator Joan Huffman, to help bring new semiconductor businesses to Texas.

The Texas Legislature recently introduced the Texas CHIPS Act, which would support all chip-related activity in the State--from research and development to design and manufacturing.

I appreciate their leadership on this front, and I am eager to see the positive impact of the chips on communities all across our State and, indeed, all across our Nation.

These are just a few of the investments that will support jobs, our economy, and our national security. The CHIPS Program is key to that success, and I hope the administration will avoid attaching controversial and additional requirements that could imperil or impede its success.

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