Congress must act on semiconductor shortage

This column by TAB CEO Glenn Hamer was originally published by the Taylor Press.


The Lone Star State has long been a global leader for semiconductor design and manufacturing, thanks in part to our leading-edge research and tech transfer capabilities, lower energy costs, favorable tax and regulatory climates, sea, land and airports.


Texas and the United States remain global leaders in designing the next generation of semiconductors. Americans hold many of the patents which power the industry. However, as China and other nations have aggressively provided incentives for new semiconductor manufacturing, Texas and the United States have been slipping.


According to the U.S. Department of Commerce, a mere 12 percent of all semiconductors globally are manufactured inside the U.S., falling from 37 percent two decades ago. That’s a problem. Semiconductors are essential to most technologies from medical devices to smartphones and automobiles, as well as to power our highly advanced national security capabilities. Regions and countries work hard to attract semiconductor manufacturing because it has the greatest economic multiplier impact of any industry sector. The pandemic and snarled international supply chains make it difficult for U.S. manufacturers to reliably and affordably access them. As a result, higher prices are being passed onto consumers, and those prices are only on course to increase.


A bipartisan group of Congressional leaders are finalizing work in the coming days on comprehensive actions to help America regain prominence in domestic semiconductor production, to create large numbers of new American manufacturing jobs, to bring down electronic goods costs for consumers and to make our country more secure.


Just the intense deliberation by Congress and the White House on the CHIPS components of the America COMPETES Act – currently in a House-Senate conference committee – has led to massive announcements of semiconductor operations returning to Texas and the United States. Earlier this year, Samsung Austin Semiconductor, NXP and Texas Instruments announced $50+ billion in investments for advanced semiconductor manufacturing in Texas. Taiwan Semiconductor is making a major expansion in Arizona. Intel announced a $20 billion site in Ohio, and GlobiTech recently announced a $5B semiconductor manufacturing expansion in Sherman.


However, both Intel and GlobiTech have signaled that these investments and expansions are contingent upon Congress’ funding of the CHIPS Act.


The America Competes would similarly address ten critically important and emerging technologies that the United States and our allies need to dominate over China and Russia, from supercomputing to additive manufacturing to Future G. It would also bolster other manufacturing priorities by reinforcing protections against counterfeiting, improving supply chain resiliency, fortifying important trade provisions and strengthening U.S. energy leadership—ensuring manufacturers here at home can compete fairly with businesses abroad.


The lion’s share of the national solution to our current dilemma lies with Congress taking actions which can unleash free enterprise in the United States and in Texas. We applaud the bipartisan leadership of Senator John Cornyn and Representatives Eddie Bernice Johnson, Michael McCaul, Lloyd Doggett, and Kevin Brady on the House measure. Without them, the CHIPS Act and America Competes would not have gotten as far as it has. Now these dedicated Texans and others in Congress must act to pass this legislation as soon as possible—for the good of our economy and national security.