China against US’ plan to boost domestic semiconductor manufacturing: Biden

WASHINGTON: Directly accusing China of intervening in American legislative processes, US President Joe Biden has said that the Chinese Communist Party (CCP) is lobbying to oppose the passage of the CHIPS Act, which is meant to create incentives to boost semiconductor manufacturing, in the US Congress since it is linked to national security.

Biden made the charge while speaking at a Lockheed facility in Alabama responsible for assembling Javelin missiles on Tuesday. The US and its allies have sent 5,500 Javelins to Ukraine to bolster its defences against Russian aggression till date. Biden has also asked the US Congress for an additional $33 billion to enhance security and economic assistance to Ukraine.

In the course of his speech, Biden also spoke of the importance of semiconductors and the need to boost its domestic manufacturing, a key policy priority for his administration. The US, according to the Department of Commerce’s National Institute for Standards and Technology, was historically dominant in the semiconductor global supply chains, but its share of global fabrication capacity has dipped from 40% in 1990 to 11% in 2020 even as their role in a range of industries, from automobiles to emerging technologies, has sharply increased.

To make up for this lag, the Creating Helpful Incentives to Produce Semiconductors for America, also known as the CHIPS Act, was embedded in the National Defense Authorisation Act. In June 2021, the US Senate passed a legislation the US Innovation and Competition Act, which included a $52 billion in federal investments for domestic semiconductor research, design and manufacturing provisions of the CHIPS Act. In February 2022, the House of Representatives passed the America Competes Act, which has a similar provision for semiconductors. Both chambers now need to arrive at a joint legislation which will then be signed into law by Biden.

“Fundamentally, this is a national security issue. This is one of the reasons why the Chinese Communist Party is lobbying folks to oppose this bill. And it’s an issue that unites Democrats and Republicans. Let’s get this done,” Biden said.

After touring the Lockheed facility, the president said he had learnt that each Javelin included more than 200 semiconductors. “I have been a broken record, as the press will tell you, on our need to be able to produce more semiconductors in the United States…We invented the sucker…we, the United States. We are the one that modernised it. We have done more than anybody else. But guess what? We stopped investing in ourselves. And so now we are back in the game, making sure that we become the primary producers of those semiconductors - computer chips that power much of our lives.”

Pointing out that semiconductors were critical to defence production capacity, Biden said it was both why the US was making it hard for Russia to get hold of semiconductors and advanced technologies, and why it was taking steps to source it domestically during a time of global shortage.

Urging the Congress to act quickly to provide the emergency funding for the CHIPS Act by passing the broader Bipartisan Innovation Act, Biden sad, “I am determined to make sure the US holds the technological high ground in competition with other nations, especially China.”

Thirty-five years ago, the US used to invest 2% of its entire GDP in research and development and now it does half of that. “We used to be number one in the world. Now we are number 13 in the world…The US used to own the innovation field.”

The Innovation Act, Biden said, would reverse “decade-long decline in federal research and development investment”, create jobs, expand US manufacturing and strengthen national security.

“Where in God’s name is it written that the United States can no longer be a leading manufacturer in the world? We have the best workers, the most competent employees, the best science in the world?”, Biden said. Saying that today, all the world’s most advanced chips were made overseas, the US president, in another indirect allusion to China, claimed that the events of the past few years had shown that America’s security should never be held hostage to events overseas - “not a pandemic, not a war, not the politics or ambition of other countries”.