When the Chips Are Down, Congress Should Support the Semiconductor Industry

The US has been forced to deal with a global semiconductor shortage for the past two years that has impacted the daily lives of almost all Americans. The experience has given us an opportunity to reflect on the wonders that make our nation’s technological, economic and military leadership possible. The computer chip industry is one of them. We discussed this with our fellow CEOs Geoff Martha at Medtronic and Jim Taiclet at Lockheed-Martin,

and it is clear to all of us that something must be done to address the shortage of chips, which is vital to our country’s economy and defense. That’s why we urge Congress to act quickly to ensure the US has a reliable supply of domestically produced semiconductors.

The shock in the supply chain caused by the pandemic has exposed a problem that has been growing for years. The US share of world chip manufacturing has declined from 37% in 1990 to 12%. South Korea and Taiwan, in particular, have spent years actively investing in their own chip manufacturing, creating an uneven playing field for US chipmakers that hurts our economy’s global competitiveness.

Take the automotive industry. Due to chip shortages, workers at some manufacturing facilities were idle for weeks. Consumers are also struggling to find new vehicles, including green electric vehicles. Some cars today are equipped with more than 1,000 chips each, a number that will only increase as cars become more electrified, connected and autonomous.

The consumer electronics industry is also facing unprecedented upheavals. As Covid-19 increased demand for laptops, PCs, smartphones and other smart devices, manufacturers struggled to source chips to meet demand. As medical providers turned to online appointments instead of doctor visits, some patients found that webcams were out of stock. As our need for technology in professional and social settings increases, so does the nation’s need for domestic manufacturing capacity to avoid disruption.

Less visible, but no less important, is the strain that chip shortages are placing on our healthcare system. During the pandemic, the lack of chip-dependent ventilators exposed weaknesses in our ability to keep Americans healthy. But the need for chips extends to other technologies that patients rely on, including pacemakers, blood pressure monitors, insulin pumps and defibrillators. If we fail to provide reliable access to semiconductors, we will be less able to provide modern medicines to our most vulnerable populations.

Semiconductors are also vital to national defense. In its 2020 Industrial Capabilities Report to Congress, the Department of Defense highlighted the risks posed by our increasing reliance on foreign technology such as advanced machine tools, photonic and optical systems, and advanced displays. The report also mentioned the risk of concentrated semiconductor development and manufacturing in some East Asian countries.

The global shortage of chips not only endangers our access to essential technology. There is also a risk that Americans’ wages will be eaten up in the form of shorter hours and higher consumer prices.

Fortunately, a solution is within reach. As early as this week, the Senate will vote on funding the Chips Act, which would provide $52.2 billion in grants to the US semiconductor industry. In addition to increasing production of top-of-the-line and legacy chips, the law would help level the playing field with global competitors. Without intervention, the shortage of chips – including legacy chips widely used in the automotive, medical device and defense industries – is expected to remain in US booths as investment. This legislation is critical to many American industries, including ours, which have faced significant disruption.

Along with Messrs. Martha and Taiclet, we urge lawmakers on both sides of the aisle to act quickly to address this crisis. By funding the Chips Act, Congress will help consumers, protect patients, and strengthen America’s economy and national security.

Mr. Farley is CEO of Ford Motor co

Mr. Gelsinger is the CEO of Intel.

If climate change is an “existential threat to human existence,” as President Biden is proposing, nuclear power may need to be part of the transition away from fossil fuels. The Bill Gates-sponsored TerraPower facility in Wyoming will be a test of this proposal. Images: TerraPower/Reuters Composite: Mark Kelly

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Alley Einstein

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