Commerce Minister Gina Raimondo on Wednesday warned that the country’s current reliance on foreign computer chipmaking puts the country at risk of recession if it is cut off. Her comments come as Congress nears a crucial vote on a bill to fund the US semiconductor manufacturing industry,
“If you allow yourself to think about a scenario where the US no longer has access to the chips that are currently made in Taiwan, that is a scary scenario,” Raimondo said. “It’s a deep and immediate recession. There’s no way to protect yourself by making military equipment. We need to make this thing in America. We need a manufacturing facility. these chips, at least enough of these chips, are here because otherwise we would be too dependent on other countries.”
More than $50 billion CHIPS Act will help subsidize the establishment of semiconductor factories in the US
Computer chips are used in a wide range of internet-connected devices, from smartphones to medical technology to cars.
Invoice, that cleared a procedural hurdle in the Senate on Tuesday but still have to pass both chambers, with support on both sides of the aisle, although some legislators have question the need to subsidize companies participated in the share repurchase. The bill now includes one prohibit on the use of funds for buybacks or dividends.
The semiconductor industry has lobbied vigorously to pass the bill, with Intel warning Their planned manufacturing plant in Ohio, which it said would initially invest $20 billion, could be delayed due to congressional delays.
Raimondo addressed criticism of this one industry over-funding by calling semiconductors “a foundational technology needed to underpin every other innovation-based industry. “
Raimondo added that the country’s overwhelming reliance on foreign chip production, with what she said is 90% of the top chips purchased from Taiwan, creates a national security risk for the US.
She said it was important to ensure companies were encouraged to expand chip production in the US, rather than moving to other countries that could offer attractive benefits.