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Fifteen Senators Urge Biden Administration to Invest in Semiconductor Manufacturing

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Fifteen Senators Urge Biden Administration to Invest in Semiconductor Manufacturing

February 4, 2021

On Tuesday, Ohio Senators Rob Portman and Sherrod Brown led thirteen of their colleagues in sending a bipartisan letter to National Economic Council Director Brian Deese. The lawmakers urged the Biden administration to help auto manufacturers address the current semiconductor shortage which has forced companies to curb production despite growing demand.

The Senators urged the Biden administration to increase investment to help meet demand.

All sectors of the economy need access to semiconductor chips, however we ask that the auto industry be recognized as the significant semiconductor consumer it is in any engagement. We also strongly urge you to support efforts to secure the necessary funding to swiftly implement the semiconductor-related provisions in the most recent National Defense Authorization Act, which would boost the production of semiconductor manufacturing and incent the domestic production of semiconductors in the future. While this is not an immediate fix, this engagement is also vital to maintain the competitive advantage of American auto manufacturing.”

In a recent report, I examined the history of US semiconductor industrial policy and the long tradition of the federal government promoting the sector's competitiveness.

The history of U.S. semiconductor industrial policy demonstrates that federal investment in research and development has promoted both American economic and national security, particularly during periods of great power competition. Early and ongoing government investments in the semiconductor manufacturing industry following World War II enabled innovation in information technology that contributed to American prosperity over the past 75 years. In addition, the sobering public warnings from the U.S. national security community about the threat posed by the PRC to American economic and security interests provide compelling reasons to support a national strategy aimed at countering Beijing’s goals of achieving technological superiority, particularly given China’s bent toward authoritarianism and posture toward liberty around the world.

The report discusses the growing bipartisan consensus on Capitol Hill for a proactive US semiconductor industrial policy and presents recommendations, including “federal investment in the semiconductor industry to maintain a strategic advantage and to drive technological innovation and to compensate for potential economic costs of new controls aimed to prevent technology transfer.”

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