The Shadow
WASHINGTON (VR) – U.S. Sen. Mark R. Warner (D-VA), Chairman of the Senate Intelligence Committee, took to the Senate floor today to stress the urgent need to pass the revised CHIPS+ legislation, which would boost investments in U.S. semiconductor production and foster American technological innovation.
“A few name changes later, and unfortunately more than a year later, I rise before this body again to express my strong support for this revised CHIPS+ legislation – which we just cleared an important hurdle for, over the last hour – and urge my colleagues to pass this bill as quickly as possible so we can get it out of the Senate, get it over to the House, and get it to the President’s desk. We cannot afford to waste any more time,” said Sen. Warner on the floor of the U.S. Senate. “This funding sends a message that the United States is putting a strong down-payment on maintaining our edge in the global technology race – and preventing global supply chains from being weaponized against the United States or for that matter, against our allies.”
“Semiconductors – often called ‘chips’ – are the backbone of our modern lives. They can be found in literally anything with an ‘on’ and ‘off’ switch, from cars and trucks… to washers and dryers… to smartphones and laptops… chips are an essential component in so many of the devices we use today, and the growth in chips is going to be exponential,” he continued.
“As Chairman of the Senate Select Committee on Intelligence, I see examples every day of how China is doubling down on its pursuit of advanced technologies that I think will define the 21st century. And, in many ways, the United States has started to fall behind,” he said. “Fortunately, it’s not too late to change that narrative or to change that result. With the right investments – like the ones that have been provided in this legislation – we can unleash the ingenuity of the American people, we can reinvigorate American innovation and improve our national security while setting the country up to lead the way on the technologies that will define our future.”
Sen. Warner’s remarks as prepared for delivery are available below:
Last June, I rose before this body to speak about the critical need to pass the United States Innovation and Competition Act, as it was known back then, in order to shore up U.S. investment in research, development, and manufacturing of critical technologies.
A few name changes and more than a year later, I rise before this body again to express my strong support for this revised CHIPS+ legislation and urge my colleagues to pass this bill as quickly as possible. We can’t afford to waste any more time.
This funding sends a message that the U.S. is putting a strong down-payment on maintaining our edge in the global technology race – and preventing global supply chains from being weaponized against us or our allies.
Over the past few years, China has continued to increase investments in its domestic industries – and particularly in areas that confer long-term strategic influence. This includes the semiconductor industry, which I have been particularly focused on over the past few years.
Semiconductors – often called “chips” – are the backbone of our modern lives. They can be found in anything with an “on” switch from cars and trucks… to washers and dryers… to smartphones and laptops… chips are an essential component in so many of the devices we use every single day.
For years, American semiconductor companies led the world in both design and manufacturing of this critical technology.
But our leadership has languished in recent years, and we continue to lose ground, particularly to East Asian markets. As a country we’ve gone from a 37% share of semiconductors and microelectronics production in 1990… to just 12% today.
On the other hand, China has ramped up its investment in chips… providing an estimated $200 billion in financial support between 2015 and 2025. Chinese orders for semiconductor manufacturing equipment rose 58% in 2021, and China has a goal to produce at least 70% of the semiconductors it consumes by 2030.
And this is a global competition.
Japan has passed a $6.8 billion investment package that will fund innovative chip manufacturing as well as research and development.
India has passed legislation investing $30 billion in their domestic electronics manufacturing industry, with $10 billion dedicated to chips and display manufacturing.
And our friends over in Europe – not known for moving with particular alacrity – have surged passed us. They started considering their investments after we passed the CHIPS Act, and Germany, for example, has already selected 32 semiconductor projects that will receive a combined $12 billion in investment.
The lack of investment by the U.S. has had a clear impact. From 2010 to 2020, only 17 major semiconductor fabs were built in the U.S. – while we’ve seen over 122 built elsewhere.
And the handful of major projects announced in the last year as a direct result of our initial efforts to authorize this funding – major facilities in Ohio, Arizona and elsewhere – are at risk due to sustained inaction by this body.
Right now, the cost of new fabs is 25-50% higher in the U.S. – and that’s partly due to the significantly lower financial incentives government provides for new construction compared to competing locales.
Many ask why it’s so vital for the U.S. to invest in new semiconductor production when the PRC is, by all accounts, still several generations behind.
US semiconductor firms – and firms in the adjacent areas of lithography, packaging, and metrology – still lead the world.
As Chairman of the Intelligence Committee, I can tell you unequivocally that the PRC is acutely aware of that gap – and aggressively working not just to close it, but to eventually leapfrog the U.S. and other major countries to lead in chip production and design.
Last year, President Xi Jinping announced a $1.4 trillion commitment through 2025 to develop advanced technologies like next-generation wireless networks and artificial intelligence. Technologies that will undergird entire ecosystems of innovation, commerce, and communications.
And the focus on semiconductors – which enable advances in AI, high-performance computing, hypersonics, and more – is arguably the centerpiece of this effort to ultimately control innovation ecosystems.
Meanwhile, many of the key ingredients to the U.S.’s historical success… including federal support for R&D, investment in basic research, and support for advanced manufacturing… have declined over the last 20 years.
Simply put, we are just not keeping up.
That’s why the $52 billion in funding for the CHIPS for America Act – a bipartisan effort that Senator Cornyn, Senator Schumer, Senator Cotton, and I led a couple of years ago – is so important. And why a parallel effort in this bill – to catalyze U.S. and allied innovation in a more diverse and resilient telecommunications ecosystem – is similarly vital.
I also would note that this isn’t simply an economic competitiveness issue.
The ability to project influence and control over global supply chains has been dramatically illustrated – on both sides – by the present conflict in Ukraine.
Simply put, ensuring that the United States has an assured supply of critical semiconductors that cannot be held hostage by a hostile power is critically important to our national security.
In addition to the funding provided in this legislation for semiconductors, the bill also makes important investments in future of our wireless telecommunications.
It includes funding for the bipartisan Utilizing Strategic Allied (USA) Telecommunications Act, which fosters U.S. innovation in the race for 5G by providing $1.5 billion to invest in Western-based alternatives to Chinese equipment providers like Huawei and ZTE.
This is a bill I was proud to work on with my colleagues, Senator Burr and Senator Rubio.
It would also stand up a new Public Wireless Supply Chain Innovation Fund – to spur movement towards open-architecture, software-based wireless technologies, funding innovative, “leap-ahead” technologies in the domestic mobile broadband market.
That approach plays to U.S. strengths like software and network virtualization. And it means we have a wider set of firms – including American firms with healthier balance sheets – competing against state-sponsored Chinese vendors.
Because one thing that’s been clear over the past two Administrations: Our anti-Huawei message won’t work unless the U.S. proposes lower-cost Western alternatives.
As Chairman of the Senate Select Committee on Intelligence, I see examples every day of how China is doubling down on its pursuit of advanced technologies that will define the 21st century. I also see that the United States is falling behind.
Fortunately, it’s not too late to change that narrative. With the right investments – like the ones this bill provides – we can unleash the ingenuity of the American people… we can reinvigorate American innovation and improve our national security while setting the country up to lead the way on the technologies that will define our future.
I urge my colleagues to support this legislation, the House to pass it, and President Biden to sign it into law as soon as possible.
