China winning race to manufacture semiconductor chips, Sen. Cornyn says

Texas Politics

AUSTIN (Nexstar) — America needs to think differently when it comes to boosting manufacturing of semiconductor chips, according to the senior Senator from Texas.

U.S. Sen. John Cornyn, R-Texas, said in a roundtable discussion with tech leaders Monday that China dominated the semiconductor supply during the pandemic and America’s supply fell behind, causing supply chain problems.

“What China is doing is they want to become the dominant economy, and the dominant superpower in the world, and that’s a vulnerability for the United States, both economically and from a national security standpoint,” Cornyn said.

Semiconductors, usually made of silicon wafers cut down to fit the size of the product they’re in, are found in appliances, computers, cars, smartphones, and other technological equipment.

“There’s been a significant gap between the strong demand and the supply in the overall industry for automotive semiconductors,” said Steve Frezon, senior vice president of front end operations at NXP, a semiconductor manufacturing company based in the Netherlands with two Austin facilities.

Touring Samsung’s Austin semiconductor manufacturing site, Cornyn said the problem has gotten worse, not better.

“Employees at car manufacturing facilities are being laid off, because there is not a reliable supply of semiconductors needed to build those cars,” he noted. “All of our cars are becoming more and more like computers on wheels.”

Congress passed legislation last year to incentivize American companies to produce semiconductors. The bipartisan Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act took effect Jan. 1. It created grant programs, established public-private partnerships with the Department of Defense, and grew the Department of Commerce to focus on research, prototyping, and semiconductor industry workforce training.

But Congress still needs to pass a funding mechanism for the legislation, or it remains hollow. The spending bill passed the Senate on June 8, and is awaiting a House vote.

“The pandemic taught us a lot of really important lessons, and to me, this was the number one lesson that we can’t just… import products made overseas, just because it’s cheaper to make it there,” Cornyn explained. “There are some strategic investments we need to make here in the United States and particularly when it comes to semiconductors, I think that’s the start.”

Jon Taylor, the vice president of fab engineering at Samsung Austin Semiconductor, said expansion is critical to future success.

“We’ve optimized our current capacity and the only way for us to meet the demand going forward is through expansion,” he said at the roundtable.

The price tag to fully fund the legislation totals $52 billion, Cornyn conceded, explaining that it will pay off to protect America’s interests.

“We’re working hand in glove with the administration and the Secretary of Commerce, so this is not a partisan issue,” he said. “This is just something we need to get done and maintain our vigilance, so that it does get done before we fall prey to this vulnerability.”

Photojournalist Chris Nelson contributed to this report.

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