While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security threat.

While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security threat. Kevin Frayer/Getty Images

How the U.S. Can Beat the Semiconductor Shortage (and China)

We must reverse our reliance on foreign manufacturing and build a better microelectronic systems industrial base.

The U.S. Senate last week passed a bill that aims to slow China’s threat to our economic competitiveness and national security by providing hundreds of billions of dollars to boost U.S. development and manufacturing in critical technology areas including artificial intelligence, quantum science, and 5G networks. It’s a welcome start, but it is not enough.

The U.S. Innovation and Competition Act, introduced by Senate Majority Leader Chuck Schumer, D-N.Y., is a major step to address China’s political-economic challenge to the United States. But it comes in the context of a greater geopolitical standoff between democracies and autocracies, highlighted this week during President Joe Biden’s European trip, including an increasingly tense political-military and trade competition between China and the United States—particularly for advanced technology.

Our trade and tech competition with China is part of this larger geostrategic reality: the Chinese Communist Party wants to stop the spread of democracy, undermine the post-World War II international order, and take control of existing global institutions in order to protect their political system. The party’s “China 2025” plan aims to achieve Chinese dominance in key technology areas in service of their values and political system in China, but also, more alarmingly, worldwide. We see this in Xinghang province and Hong Kong, where surveillance has essentially rendered populations prisoners to the Beijing government. We’ve also seen it in China’s leading role selling surveillance technology, globally. China is competing with U.S. and other foreign companies to sell crime-fighting technology that bolsters safety and security. However, Chinese companies are selling systems and introducing operations—the rules for their use—to other autocracies in Africa and Asia, and illiberal democratic states in Europe. The Chinese model for using their technology leaves no room for privacy or individual rights. It is a clear danger to human rights and democracy all over the world. 

Indeed, the rising specter of a Chinese invasion of Taiwan puts the issue in startlingly clear terms. U.S. manufacturing companies rely almost completely on microelectronics produced and integrated in East Asia, and U.S. tech firms get as much as 90 percent of their semiconductor chips from Taiwan. Semiconductors are a microelectronic component required in everything from electric toothbrushes to missile systems. A sustained disruption in the flow of trade from Taiwan could devastate the U.S. economy and national security.

The situation has become urgent with the recent and ongoing pandemic-induced shortage of semiconductors upending global markets and threatening national security. It was the impetus for the CHIPS Act, now a component of the Schumer bill, to provide a $52 billion boost to domestic semiconductor manufacturing. The Senate goal is to jumpstart American research and development efforts and revitalize competitive manufacturing of semiconductors. If Congress sets requirements so that subsidies come with standards, a demand for American chips can eventually become market-driven, based on quality and reliability. Whatever the congressional action, it should come with assurances that we will continue to stand by Taiwan, which is in greater danger daily as it provides the nearest democratic refuge for mainland or Hong Kong Chinese dissidents.

Without a more comprehensive approach toward protecting the integrity of the U.S. supply chain, the current effort will leave our nation vulnerable to many of the same risks this bill is intended to address.

While the media has headlined China’s internet-based espionage and sabotage, including the Equifax, Microsoft Exchange, and OPM hacks, less attention has been paid to significant breaches of U.S. government and commercial networks by Chinese companies paid to assemble final products for the U.S. semiconductor market. Trusted domestic semiconductor manufacturing is critical for commercial competitiveness and national security, but if chips and other microelectronic systems continue to be integrated onto circuit boards in East Asia before making their way back to the U.S., as is often the case, our nation remains exposed to unacceptable risk.

Moreover, the bill doesn’t address the vital issue of protecting the American intellectual property that underlies many of the most advanced chip designs, a key risk given China’s aggressive espionage and explicit goal of dominating this vital industry.

Shortly after taking office, Biden signed an executive order directing federal agencies to review crucial gaps in domestic manufacturing capacity, and in particular instances of reliance on supply chains dependent on “competitor nations,” meaning China. The next steps involve establishing a more proactive, cooperative relationship between the government and the American industrial base developing and manufacturing these critical technologies. This is perhaps most urgent when it comes to the billion-dollar defense industry. In the future, the U.S. military’s success on the battlefield will be determined by the government’s ability to rapidly incorporate technological achievements from the commercial sector. The Pentagon must insist on the state-of-the art in the design of its defense systems, especially the sensitive microelectronics designs. 

Congress should significantly expand the funding and responsibility of the expert DOD microelectronics office known as the Defense Microelectronics Activity, or DMEA, and convert it into a full-blown agency. The new organization should leverage and scale American microelectronics expertise to maintain a qualitative U.S. technological advantage in the effectiveness, production, and integration of microelectronics in the defense sector. The new DMEA should be charged with safeguarding America against potential microelectronic trade disruptions, working with industry leaders to protect critical IP, and ensuring that our microelectronics industry remains globally competitive not just in innovation, but in manufacturing and integration, as well. DMEA should become the hub of government-wide efforts to articulate a holistic microelectronic industrial and security strategy, implementing anticipated recommendations by the secretary of defense’s Cross-Functional Team on Microelectronics. Meanwhile, Congress can help by creating a statutory requirement that major government procurement programs incorporate commercial best-practices in microelectronic systems development.

The costs and risks of our current system are clear, and increasingly untenable. Incorporating advanced commercial microelectronic solutions can help address the production delays and cost-overruns that have hamstrung the fielding of so many advanced systems. The beleaguered KC-46 tanker’s Remote Vision System and the historically troubled F-35 program are just two recent examples in which commercially available microelectronic pre-fabrication emulation technologies could have helped mitigate costly delays.

Microelectronics literally enable the advanced technology domains that represent the future of global competition, from artificial intelligence to quantum computing. If the United States is to prevail over the challenge posed by China, we must reverse our reliance on foreign manufacturing, and microelectronic systems integration, and reconstitute our relationship with our domestic microelectronic industrial base. This is not merely an issue of economic competitiveness, it is critical to winning the faceoff between democracy and autocracy.

Dr. Evelyn N. Farkas was a deputy assistant secretary of defense under President Obama, serves on the board of the Project 2049 Institute and is a consultant to several technology companies doing business with the Department of Defense.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.