By Jeffrey D. Bean and Stephen Ezell
In 2021, Jeffrey Bean and Stephen Ezell wrote, “When the Chips are Down: Policy Priorities for Sustaining U.S. Semiconductor Leadership,” for War on the Rocks, in which they argued that in order for the United States to retain advantage in critical semiconductor technology, the government should strive to surmount policy challenges including export controls and allied cooperation. In response to intensifying competition between the United States and China over semiconductor technologies, War on the Rocks asked them to look back on this article, as part of the Rewind and Reconnoiter series.
In your article, “When the Chips Are Down: Policy Priorities for Sustaining U.S. Semiconductor Leadership,” written in 2021, you argue that the United States should effectively calibrate semiconductor policy responses, particularly with industry leaders, to maintain national security advantages relative to China. Over the past three years, how effective has U.S. semiconductor policy been in retaining advantage over China?
The United States has taken several key steps that we advocated. Foremost was passing the CHIPS and Science Act with bipartisan Congressional support in August 2022, which included appropriations of $52.7 billion for the CHIPS Act. The act renewed focus on right-shoring all elements of the semiconductor supply chain to mitigate risk, which has spurred over $230 billion in announced new investments from U.S. and foreign chip manufacturers in the United States and its allies and partners. This included key investments in New York, Ohio, Indiana, Texas, and Arizona, as well as in Japan, Germany, Taiwan, and South Korea, India, and Southeast Asia. This is a tangible, cross-sectoral achievement, but only the very first leg of a long competition.
Preliminary U.S. CHIPS Act awards to Global Foundries, Intel, and the Taiwan Semiconductor Manufacturing Company, along with (hopefully) similar awards for Samsung, Micron, and SK Hynix, among others, will be important to achieving progress. Legacy chip fabrication–focused awards for national defense applications to BAE Systems and Microchip are also critical. There is also positive momentum at universities and community colleges in the science, technology, engineering, and mathematics education fields tied to chips – this investment means that thousands of jobs will need to be filled. Standing up the National Semiconductor Technology Center, a $5 billion public-private partnership that will provide domestic access to advanced prototyping capabilities, leverage shared facilities, and help build a skilled and diverse semiconductor workforce, will be critical to maintaining competitiveness in semiconductor manufacturing.
Read the responses to all five questions in the full article here.