U.S. Sen. Mark R. Warner took to the Senate floor this week in support of the United States Innovation and Competition Act, bipartisan legislation that includes Warner-led provisions to foster U.S. innovation in the race for 5G and shore up American leadership in the microelectronics industry.
This speech comes one day after the Senate reached a bipartisan deal with a procedural vote to move forward with the legislation.
The United States Innovation and Competition Act – also known by an earlier name, the Endless Frontier Act – would help invest in domestic semiconductor manufacturing, packaging and advanced research and development.
The bill proposes investing $52 billion to implement the CHIPS for America Act, a bipartisan law championed by Sen. Warner (D-VA), chairman of the Senate Intelligence Committee, to help restore semiconductor manufacturing back to American soil.
Semiconductors power modern technology, including cars, computers, smartphones and an increasing number of internet-connected ‘smart’ devices as varied as laundry machines to toothbrushes.
A current production shortage of chips has backed up manufacturing supply lines in the United States, with major automobile manufacturers projecting $110 billion in lost sales this year due to factories sitting idle while waiting for components, and increased costs for goods such as televisions and home appliances dependent on imported semiconductors being passed on to U.S. consumers.
Demand for semiconductors is expected to continue to grow, as internet connectivity and software processing is added to an ever-wider array of consumer, enterprise, and industrial products, services, and systems.
“The semiconductor industry, while we’ve seen some sliding, still represents one of the shining lights of our country’s innovation economy. And as a wider array of products and services depend on internet connectivity and software processing, the demand for semiconductors has only grown. Unfortunately, that leadership position we’ve had for so long is at stake,” Warner said. “So the CHIPS Act, which was baked into the Endless Frontiers Act, directs agencies like the Department of Commerce, in consultation with others like our Intelligence Community, to make investments in microelectronics R&D a priority.”
He continued, “It emphasizes the need for multilateral effort with our allies and close trading partners to bring greater transparency and accountability to subsidies. It aligns policies towards non-transparent, non-market competitors like the Chinese, and it makes sure that we have concerted and coordinated action both domestically and again, with our allies, on supply chain security and integrity. It invest billions in basic research related to advanced semiconductors, via DoD and a newly created National Semiconductor Technology Center – helping us maintain our lead in the design, prototyping, lithography and packaging of advanced microelectronics. And it makes an unprecedented investment in trying to build new foundries, fabs, and basic manufacturing facilities here in the United States so that we have that secure supply chain for the future.”
This crucial provision comes as the U.S. faces a decline in R&D and advanced manufacturing, including in advanced chip manufacturing. As Sen. Warner noted on the Senate floor, U.S. production of semiconductors and microelectronics has gone down from 37 percent in 1990 to just 12 percent today. By contrast, China has committed to invest $150 billion and produce at least 70 percent of semiconductors it consumes by 2030.
The United States Innovation and Competition Act also includes funding for the bipartisan Utilizing Strategic Allied (USA) Telecommunications Act, legislation Sen. Warner introduced to provide Western-based alternatives to Chinese equipment providers like Huawei and ZTE, which are heavily subsidized by the Communist Party of China and present serious risks to national security and the integrity of information networks globally.
“I was proud to work with two of my colleagues, Senator Burr and Senator Rubio. We put up a Public Wireless Supply Chain Innovation Fund to spur movement towards open-architecture and ‘leap-ahead’ technologies in our domestic mobile broadband market,” said Sen. Warner. “I believe that so-called ‘Open RAN’ represents the single best approach to tackling the 5G challenge – opening the radio access network to competition from a wider array of players, including startups, non-traditional players like software companies, and enterprise networking companies. 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 Huawei. 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.”
With the U.S. funding less than 28 percent of global R&D – down from 69 percent after World War II – the Warner-led provision would put forth $1.5 billion to invest in Western-based alternatives to Chinese equipment providers and $500 million to work with close allies and trading partners on the development and adoption of secure and trusted wireless infrastructure globally.
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