tv U.S. Senate Sens. Portman Cornyn on Computer Chip Funding CSPAN July 20, 2022 2:30am-2:57am EDT
so, mr. president, our ability to rise to this occasion will demonstrate whether the united states is willing to creed to innovation and economic higher ground to the communist chinese party or whether we will stand up to the people's republic of china and reinvest in the manufacturing and innovation prowess that has made america a lone super power for decades. i submit that if we fail to pass this bill immediately, we will set back america's competitiveness for a generation or more. this critical moment requires all of us to put the country above politics. imagine that. put the country above politics. put hardworking american families who are doing the best they can right now above politics, and strengthen our nation's competitiveness. so i urge my colleagues to join
me in supporting this strong chips legislation and let's ensure that the next century like the 20th century is the american floor. mr. portman: marp. the presiding officer: the senator from ohio. mr. portman: madam president, i come to the floor today because we're poised to begin consideration of a important piece of legislation. it's a plan to make america more competitive with china and a plan to bring good jobs back to america. the bipartisan chips act, which ensures american workers and american companies get the tools they need to compete and win. let me give some background on why this is so badly needed. u.s. dominant in -- u.s. dominance in semiconductor production has twindled. the u.s. has always led the world in chip design. we came up with this technology, but our share of the global chip manufacturing capacity over the
past 30 years has gone from about 37% down to less than 12% today. as a result we rely more and more on foreign countries for these essential chips. in the past few years the supply chain has not been reliable. you know that if you tried to buy a car recently, maybe even a washing machine, you had to wait forever. why? because of the lack of semiconductors. these chips just aren't available. we all come to learn in recent years that semiconductors are the building blocks of everything, household appliances, computers, medical equipment, but also military systems and weaponry like the f-35. and in a more dijal economy by the way, the demand for the semiconductors, these chips will only continue to grow. last year this lack of semiconductors caused an estimated loss of $240 billion to the u.s. gross domestic product. so $250 billion hit to our
economy, according to the department of commerce last year, just because of the supply chain issues with semiconductors. this is more complicated by the key role that our adversaries play in the production of the semiconductors. and the fact that we rely on some very vulnerable nations for critical components of the supply chain. neon gas which is critical for the laser and printing of the chips comes largely from ukraine. taiwan is the number one semiconductor fabricator in the world. by the way, 90% of the high end chips are made in taiwan. none are made here in america anymore. 90%. of course taiwan's proximity to china and the constant threat of invasion by china adds to the urgency of diversifying the semiconductor supply chain. by incentivizing companies toe make the critical components here in america, we can make our supply chains more resilient, protect our national security and boost economies all across the country. that's why chips is so important and why we've been working in a bipartisan fashion in congress through legislation like this and the broader usica
legislation. this legislation would work to improve our nation's competitiveness generally in technology, foreign relations and national security, domestic manufacturing, education, trailed, and other matters. -- trade, and other matters. the chips act specifically would bring $52 billion in federal investments for domestic semiconductor research designed and manufacture -- design, and manufacturing. the broader bill, so-called usica bill last june passed this senate with an overwhelming bipartisan vote. we had hoped that the house would simply pass the senate-approved bill because it was already bipartisan. it had been worked out with democrats adds republicans in the senate. 19 republicans support it. all 50 democrat senators supported it. the white house supported it. but instead the house sat on it. took them almost a year, 11 months to pass their bill but when they passed it, it was filled with all sorts of unrelated items that no republican could support. that's why this has gone so slowly. so earlier this summer we began conferencing, the house and
senate-passed bills trying to find that common ground between the two bills. we made some progress but both chambers have yet to agree on a final product. meanwhile, there's an urgency to get this done. because it's critical to the decisions that employers are making right now to create and bring semiconductor manufacturing factories and jobs to america or to some other country. in january intel announced its plan to build a $20 billion site consisting of two semiconductor fabs in the united states and in my home state of ohio. this is the largest investment in ohio's history by far. comes with a grand total of again $20 billion, two fabs. we hope that's just a start. intel has said time and time again that if the chips act funding is enacted this will move forward and move forward quickly. they've also said that if it moves forward, the chips act, it could be extended, the $20 billion to -- up to $100 billion investment in ohio.
remember, the $20 billion is already historic. that's because they would continue to build fabs, not just two but up to ten. this 3,000-acre site in ohio could be home to up to eight additional fabs and make central ohio the silicon heartland. this would be great for my state, great for our region, and great for our country. this initial investment, by the way, would create about 10,000 good-paying jobs, 3,000 on site, all good high-paying jobs, good benefits but also 7,000 good paying construction jobs in putting it together. tens of thousands of additional electrical, engineering, supplier, restaurant, housing, health care and entertainment jobs to support the region as it expands thanks to this investment. the suppliers alone will be tens of thousands of new jobs. ohio has already projected that this investment will add $2.8 billion to the state's g.d.p. and that's just a start. investment like what's in front of us in ohio, by the way, as well as similar efforts in arizona where the presiding officer is from, texas where my colleague senator cornyn is from
here on the floor with us today, are all perfect demonstrations of what this investment in semiconductor incentives can mean to american workers and companies. china has committed a lot more than we're talking about. by the way, a lot of other countries. this is not a free market situation. one of my colleagues today asked me about -- shouldn't we let the market decide. if the market decides and china is offering $150 billion which they are over the next ten years, when europe has its own legislation next to ours and it offering tens of euros, tens of billions of euros or when south korea or japan or taiwan are offering the huge incentives, it's very difficult to see us being able to bring these chaips back to america where -- chips back to america where costs are a little higher and be able to be competitive. we need that to happen for our domestic economy but also our national security. if we fail to act, we're going to miss a key opportunity here to boost our competitive edge as a nation.
these fabs will go elsewhere. i'd also like to see us include some of the other key pieces of the broader passed usica bill. 19 of us supported it here on the republican side. that includes critical new vesms in research but also key protections to be sure that that research is not stolen by foreign governments such as china. we've got to remember the overall goal of this effort is to improve our country's competitiveness, especially with regard to china. to do that we must not only invest in research and innovation which i strongly support but we must protect that taxpayer funded research and intellectual property and being taken by competitors like china and used against us. i believe given current realities, without such protections, any bill would significant increased lefts of federal funding for research would be a huge giveaway to beijing. why do i say that? because i've worked on this issue for the past four years. we've investigated it.
held hearings. we've passed legislation. recently f.b.i. director wrai said it well -- wray said it well. the biggest threat we face as a country is from the people's republic of china, particularly the chinese communist party. they are targeting our innovation, our trade secrets, our intellectual property on a scale that is unprecedented in history. end quote. that's the director of the f.b.i. senator carper on the other side of the aisle and i introduced what's called the safeguarding american innovation act and insisted that it be included in the usica legislation in order for us to support it. that was my condition for supporting the broader usica bill. this came after we did a year long study with the permanent subcommittee on investigations that found, shockingly, how china had used what are called talent programs for two decades, two decades, to target the most promising taxpayer-paid research and researchers and to take that technology, that intellectual property back to china.
we found that the american tax patience had been unwittingly funding the rise of china's military and economy over the past two decades while the federal government had done very little to nothing to stop it. in fact, when the f.b.i. testified at our hearing, they acknowledged that. they said we haven't been focused on this the past couple decades like we should have been. we're going to now and started to. they've started to make arrests and you probably heard about some of these, arresting scientists all over the country who are abusing our lax attitude toward protecting research by taking research back to china and using it often against us. this legislation goes directly to the root of the problem. it makes it punishable by law to knowingly fail to disclose foreign funding on federal grant applications. that is not a law now. the f.b.i. has asked us for that law. it requires the executive branch to streamline and coordinate grant making between the federal agencies so there's continuity, accountability, and coordination. that does not happen now. it's too wide open.
it's not coordinated. it allows the state department to deny visas so foreign researchers who are coming to the united states to exploit the openness of our research enterprise. and it requires research institutions and universities to do much more, including telling the state department whether a foreign research will have access to export control technologies. we've worked on this legislation again for the past few years. we have made lots of compromises and concessions with people who had potential concerns about it. we have come up with legislation that is bipartisan, makes sense. it's already passed with an overwhelming margin in the united states senate. i want to be sure before we spend billions of dollars more in federal research, which is being proposed, including to the national science foundation, that that research can be protected. who could be against that? who could be for china being able to have better access to this information? nobody. again, a vital component of any competitiveness bill is this commonsense extensive negotiated bipartisan bill which is already concluded in the homeland
security title of usica. i can't stress enough the importance of passing this legislation and it should be done on a bipartisan basis because it has been done before. it just makes sense. the broader usica bill and the chips bill are both important. and to pass the chips legislation is critical right now. it is urgent. and then what we can pass in terms of usica is also important but again if we're putting more money into research which is being proposed and which i support, it has to be protected. that's pretty simple and common sense. there's no perfect bill but this bill will help keep america's economy competitive, help people american jobs here and grow new job, good-paying jobs with good benefits. we should pass this legislation, get it through the house, and take it to the president's desk for signature. i hope my colleagues will join me in supporting its passage. thank you and i yield the floor.
mr. cornyn: madam president. the presiding officer: the senator from texas. mr. cornyn: madam president, i want to express my gratitude to the senator from ohio for his excellent remarks and for his support getting us to the point we are today which is on the cusp of a historic accomplishment, and that is to make sure the supply lines of advanced semiconductors remains available to american businesses and even more importantly to our national security. now two years ago, senator warner, the senior senator from vermont and i introduced the chips for america act. and it's been a long, strange trip until today. but i dare say at the time we introduced the bill, there were many people didn't know the difference between chocolate chips and microchips. and frankly that's an exaggeration but the point is most people are really unaware
of the dependency of our economy and our national security and frankly just the quality of our life on access to these microcircuits known as semiconductors. and over time the semiconductor manufacturers have been able to make them smaller and smaller and more and more powerful until your cell phone which is essentially a mini computer contains thousands of these microchips. and again whether you're talking about a laptop computer or a new car or a washing machine or just some desk top computer, all of them depend on access to the semiconductors. as i said, senator warner and i introduced the bipartisan chips for america act two years ago. 18 months ago this legislation
became law. that was part of the national defense authorization act. 13 months ago the united states senate passed a bipartisan bill to fund the program. unfortunately as the senator from ohio mentioned, the house failed to respond to the bipartisan usica bill, the u.s. innovation and competition act, and sent over a partisan bill which has delayed our consideration of this important legislation unnecessarily. but today i'm optimistic that the senate will follow up on its commitment to enact this chips funding into law before we break for the august recess. this afternoon we'll take a procedural vote to kick-starts consideration of the legislation -- to kick-starts -- kick-start consideration to the legislation. as we lead up to this important debate, many of us have been talking about the size and shape of the bill on both sides of the
aisle. and there's still some things that need to be decided and the fate of the bill is not yet secure. being the majority leader, senator schumer will ultimately be the one to determine what the size and shape of the bill will look like. but i'm encouraged by where we stand. this bill will not, however, be the senate's u.s. innovation and competition act or the usica bill or the house's massive partisan america competes act. this will be a far more narrow bill that focuses on the core issue of semiconductor manufacturing. semiconductor manufacturing is, as i said, the key to our economy and our national security. and as it turns out, most of the manufacturing capacity has been built overseas, primarily in asia, because it's significantly cheaper to build those manufacturing facilities
there rather than here. i'm not opposed to additional commerce provisions, for example, that have already been voted on as part of usica be included. but anything else that is included by senator schumer must be bipartisan, and those decisions have to be made very quickly. the time for voting on this bill should not be delayed any further. over the last three decades, the united states has gone from making 37% of these microcircuits, or semiconductors, 37% to 12% now. when you look at the most advanced chips, the smallest and the most powerful, none of these are made in the united states. none. taiwan's semiconductor located in taipei, taiwan, has a great business model. american companies design the chips and they make them, and
as i said, it's cheaper to make them in asia than it is here in america. but post-covid we have come to realized vulnerability of our supply chains for virtually everything. and when you look at the dependency and what it might mean to our country, it's shocking. the ceo of micron out of idaho has said there is a 35% to 45% cost gap between domestic and overseas production. if you're talking about making toys or something like that, or furniture items, it's great to have a cheaper alternative where that product is manufactured overseas rather than here in america. that's good for consumers. it makes things a lot more affordable. but when you're talking about a sole source for the most advanced semiconductors, that goes from being a convenience to
a nightmare. and of course during the pandemic, we've experienced a number of supply chain vulnerabilities. and now as the economy around the world continues to expand, anybody who's tried to buy a car, a dishwasher or a computer over the last couple of years has likely been impacted with higher costs or long delays, or both. as a matter of fact, due to the shortages of supply, that's necessarily driven the cost higher, which has further exacerbated compilation. -- exacerbated inflation. there is an even more important to get this bill done. the chip shortage and lack of domestic manufacturing capability is a huge national security risk. that's why the secretaries of the department of defense and commerce said in a letter to congress a few weeks ago, saying very clearly, and i
quote, funding the chips act is critical to our national defense, close quote. that's why the republican-led senate passed the original bill and helped it become law during the previous administration, and that's why i hope the current congress will fund it with today's vote, or actually this week's vote. whether it's advanced fighters, the fifth generation stealth strike fighter like the f-35, whether we're talking about quantum computing, the next generation of computing, if we're talking about missile defense systems or the stinger or javelin missiles that we have exported to ukraine to defend themselves against russian aggression, all of them depend on semiconductors. as a matter of fact, a single report interceptor used in israel's iron dome, for example, contains more than 750
chips. and overreliance on other countries to produce the key components of our most vital defense assets is a huge and unacceptable risk. as i said, that's why senator warner and i initially introduced the bill last june of 2020 and why it received such strong bipartisan support. building a new foundry or a fab as they're sometimes called is a huge undertaking and requires a massive investment. a single foundry can cost upwards of $10 billion to $20 billion. $10 billion to $20 billion. and without some level of support from the government, these investments simply won't materialize, at least not in america. other governments, as you've heard, have made similar investments in semiconductor manufacturing, trying to make sure that their supply chain is not vulnerable.
countries like china, south korea, taiwan, singapore, germany, and a number of others have included, including over $100 billion pledge to boost semiconductor manufacturing in the european union alone. the united states simply cannot get left behind, and we can't keep dragging our feet. it doesn't take a lot of money to get these foundries up and running. it also takes time. last year i hosted a roundtable in dallas, texas, to talk about the impact of the chip shortage with industry leaders. during our conversation, a cargo sciewfl talked about how -- executive talked about how it can take years to receive all the high-functioning equipment necessary to make semiconductors. that's why there's been such a big push in congress to get this out the door. chip makers who have to make decisions about where and when
to build their next manufacturing facility need to know that these incentives are available for them to build those foundries here in america america, and the window of that decision making process is closing rapidly. if it closes, if we continue to drag our feet and not fund the chips bill, they're going to pull their investments from new or expanded foundries in the united states and take them overseas. this isn't just a chicken little claim. companies have put out the warning call, and i believe them. one company called global wafers is planning to build a new silicon wafer fact in sherman, texas, which would create up to 1,500 new jobs and produce 1.2 million wafers a month. silicon wafers are an essential component of semiconductors. commerce secretary gina raimondo said the ceo told her that their
plan to build this factory in sherman, texas, is contingent on congress passing the chips act. unless the funding is approved by this august recess, which is rapidly approaching, the company will scrap plans for that facility. as you heard from our colleague from ohio, the ceo of intel expressed a similar sentiment for a planned ohio facility. he said the company would expand chip production in europe instead of america if congress fails to pass this funding. another company, nxp semiconductors, is weighing new investments too. it's looking toking expanding one of its factories in austin, texas, a project that would cost roughly $2.6 billion. the company is planning to decide later this year whether to move forward with that investment or to take that investment to europe or asia.
in other words, madam president, there are real consequences on the line. if congress passes its chip funding act in the coming days, we can shore up this domestic supply chain vulnerability, bring good jobs back to america, and protect our economic and national security. but if we fail to act or if we fail to act with dispatch, all of those benefits will evaporate and all of those dangers will become our worst nightmare. instead of here in america, those benefits from building those fabs will rain down on communities on the other side of the planet instead of here at home. it's been more than a year and a half since the chips act became law, and we simply cannot afford to wait any longer. every day that goes by creates additional risks. unless congress gets this job
done in the coming days, these companies will simply go elsewhere. chips funding will help secure our most critical supply chains. it will create thousands of well-paying jobs, and boost our global competitiveness by providing a made in america chips to our friends and allies around the world. so, madam president, we have a big opportunity ahead of us, but big risks in not acting as well. and success, i believe, is our only option. madam president, every once in e makes a good point. today they did. mr. president, i recently came across a very, very interesting interview that the c.e.o. of intel did last friday on cnbc's squawk box. i think that