Source: United States Senator for Ohio Rob Portman
July 19, 2022 | Press Releases
WASHINGTON, DC – This afternoon, U.S. Senator Rob Portman (R-OH), spoke on the Senate floor to discuss the need for the United States to stay competitive in the global economy. Portman highlighted the bipartisan CHIPS Act and the broader United States Innovation and Competition Act of 2021, or USICA, which will shore up semiconductor manufacturing in America. Senator Portman has been an advocate for this legislation since it passed the Senate over a year ago. Since then, Portman has worked across the aisle with Republicans and Democrats alike to get this bill to the president’s desk before the August recess.
Semiconductor chips are essential to everything from automobiles, cell phones, household appliances, and military weaponry. The CHIPS Act will invest $52 billion in this technology and provide thousands of good-paying jobs to communities across the country. In Ohio, this legislation will help Intel increase their $20 billion investment in New Albany to build two semiconductor foundries to potentially $100 billion and eight total foundries.
Portman also discussed his bipartisan Safeguarding American Innovation Act, which passed the Senate last year on a bipartisan basis as a part of the U.S. Innovation and Competition Act. Portman and Senator Tom Carper (D-DE), as Chairman and Ranking Member of the Permanent Subcommittee on Investigations (PSI), led a year-long investigation that revealed how American taxpayers have been unwittingly funding the rise of China’s military and economy over the last two decades while federal agencies have done little to stop it. Starting in the late 1990s through its “talent recruitment programs,” China began recruiting U.S.-based scientists and researchers to transfer U.S. taxpayer-funded IP for China’s military and economic gain. This legislation will ensure the federal government is taking decisive action to safeguard American innovation and Portman insisted that the legislation be included in the competitiveness bill that will come before the Senate.
A transcript of his remarks can be found below and a video can be found here.
“Madam President, I come to the floor of the Senate today because we’re poised to begin consideration of a really important piece of legislation. It’s a plan to make America more competitive with China and a plan to bring good jobs back to America. I’m talking about the bipartisan CHIPS Act, which includes reshoring semiconductor manufacturing to America and giving American workers and American companies the tools they need to compete and win. Let me give some background on why this is so badly needed. U.S. dominance in what’s called ‘semiconductor manufacturing’ has dwindled for decades and it’s an economic and a national security concern. The U.S. has always led the world in chip design. We came up with this technology, but our share of the global chip manufacturing capacity over the past 30 years has gone from about 37 percent down to less than 12 percent today. As a result, we rely more and more on foreign countries for these essential chips. In the past few years the supply chain has not been reliable. You know that if you tried to buy a car recently, maybe even a washing machine, that you had to wait forever. Why? Because of the lack of semiconductors. These chips, they just are not available.
“We’ve all come to learn in recent years that semiconductors are the building blocks of everything — automobiles, cell phones, computers, household appliances, medical equipment, but also military systems and weaponry, like the F-35. And in a more digital economy by the way, that demand for these semiconductors, these chips, will only continue to grow. Last year this lack of semiconductors caused an estimated loss of $240 billion to the U.S. Gross Domestic Product. So, $250 billion hit to our economy, according to the Department of Commerce last year, just because of these supply chain issues with semiconductors. This is more complicated by the key role that our adversaries play in the production of these semiconductors and the fact that we rely on some very vulnerable nations for critical components of the supply chain. Neon gas, which is critical for the laser and printing of the chips, comes largely from Ukraine. Taiwan is the number one semiconductor fabricator in the world. By the way, 90 percent of the high-end chips are made in Taiwan. None are made here in America anymore. Ninety percent. Of course, Taiwan’s proximity to China and the constant threat of invasion by China adds to the urgency of diversifying the semiconductor supply chain. By incentivizing companies to make these critical components here in America, we can make our supply chains more resilient, we can protect our national security, and we can boost economies all across the country.
“That’s why CHIPS is so important and why we’ve been working in a bipartisan fashion in Congress through legislation like this and the broader USICA legislation. This legislation would work to improve our nation’s competitiveness, generally, in technology, foreign relations and national security, domestic manufacturing, education, trade, and other matters. The CHIPS Act specifically would bring $52 billion in federal investments for domestic semiconductor research, design, and manufacturing. The broader bill, so-called USICA bill, last June passed this Senate with an overwhelming bipartisan vote. We had hoped that the House would simply pass the Senate-approved bill because it was already bipartisan. It had been worked out with Democrats and Republicans in the Senate. Nineteen Republicans supported it. All 50 Democrat senators supported it. The White House supported it. But instead, the House sat on it. Took them almost a year to pass their bill, but when they passed it, it was filled with all sorts of unrelated items that no Republican could support. That’s why this has gone so slowly. So earlier this summer we began conferencing, the House and Senate-passed bills, trying to find that common ground between the two bills. We made some progress, but both chambers have yet to agree on a final product.
“Meanwhile, there’s an urgency to get this done because it’s critical to the decisions that employers are making right now to create and bring semiconductor manufacturing, factories, and jobs to America or to some other country. In January, Intel announced its plan to build a $20 billion site consisting of two semiconductor fabs in the United States and in my home state of Ohio. This is the largest investment in Ohio’s history, by far. It comes with, again, a grand total of again $20 billion, two fabs. We hope that’s just a start. Intel has said time and time again that if the CHIPS Act funding is enacted this will move forward and move forward quickly. They’ve also said that if it moves forward, the CHIPS Act, it could be extended – the $20 billion –up to a $100 billion investment in Ohio. Remember, the $20 billion is already historic. That’s because they would continue to build fabs, not just two, but up to 10. This 3,000-acre site in Ohio could be home to up to eight additional fabs and make central Ohio the silicon heartland. This would be great for my state, great for our region, and great for our country. This initial investment, by the way, would create about 10,000 good-paying jobs, 3,000 on site, eventually all good paying, high-paying jobs, good benefits, but also 7,000 good paying construction jobs in putting it together. Tens of thousands of additional electrical, engineering, supplier, restaurant, housing, health care, and entertainment jobs to support the region as it expands thanks to this investment. The suppliers alone will be tens of thousands of new jobs.
“Ohio has already projected that this investment will add $2.8 billion to the state’s GDP and that’s just a start. Investments like what’s in front of us in Ohio, by the way, as well as similar efforts in Arizona, where the presiding officer is from, Texas where my colleague Senator Cornyn is from here on the floor with us today, are all perfect demonstrations of what this investment in semiconductor incentives can mean to American workers and American companies. China has committed a lot more than we’re talking about. As have, by the way, a lot of other countries. This is not a free-market situation. One of my colleagues today asked me today about, ‘shouldn’t we let the market decide?’ If the market decides and China is offering $150 billion, which they are over the next 10 years, when Europe has its own equivalent legislation to ours and is offering tens of billions of dollars, tens of billions of euros or when South Korea or Japan or when Taiwan are offering the huge incentives, it’s very difficult to see us being able to bring these chips back to America where costs are a little higher and be able to be competitive. We need that to happen for our domestic economy, but also our national security. If we fail to act, we’re going to miss a key opportunity here to boost our competitive edge as a nation because these fabs will go elsewhere. I’d also like to see us include some of the other key pieces of the broader Senate-passed USICA bill that was passed on a bipartisan basis. Again, 19 of us supported that here on the Republican side. That includes critical new investments in research, but also key protections to be sure that that research is not stolen by foreign governments, such as China.
“We’ve got to remember the overall goal of this effort is to improve our country’s competitiveness, especially with regard to China. To do that we must not only invest in research and innovation, which I strongly support, but we must protect that taxpayer-funded research and intellectual property from being taken by competitors like China and used against us. I believe given current realities, without such protections, any bill with significant increased levels of federal funding for research would be a huge giveaway to Beijing. Why do I say that? Because I’ve worked on this issue for the past four years. We’ve investigated it. We’ve held hearings. We’ve passed legislation. Recently FBI Director Wray said it well, the biggest threat we face, he said, as a country from a counterintelligence perspective, is from the People’s Republic of China, particularly the Chinese Communist Party. ‘They are targeting our innovation, our trade secrets, our intellectual property on a scale that is unprecedented in history.’ That’s the Director of the FBI. Senator Carper on the other side of the aisle and I introduced what’s called the Safeguarding American Innovation Act and insisted that it be included in the USICA legislation in order for us to support it. That was my condition for supporting the broader USICA bill. This came after we did a year-long study with the Permanent Subcommittee on Investigations that found, shockingly, how China had used what are called talent programs for two decades, two decades, to target the most promising taxpayer-paid research and researchers and to take that technology, that intellectual property, back to China.
“We found that the American taxpayers had been unwittingly funding the rise of China’s military and economy over the past two decades while the federal government had done very little to nothing to stop it. In fact, when the FBI testified at our hearing, they acknowledged that. They said we haven’t been focused on this the past couple of decades like we should have been. We’re going to now and they started to. They’ve starting to make arrests and you probably heard about some of these, arresting scientists all over the country who are abusing our lax attitude toward protecting research by taking research back to China and using it, often, against us. This legislation goes directly to the root of the problem. It makes it punishable by law to knowingly fail to disclose foreign funding on federal grant applications. That is not a law now. The FBI has asked us for that law. It requires the Executive Branch to streamline and coordinate grant making between the federal agencies so there’s continuity, accountability, and coordination. That does not happen now. It’s too wide open. It’s not coordinated. It allows the State Department to deny visas so foreign researchers who are coming to the United States to exploit the openness of our research enterprise. And it requires research institutions and universities to do much more, including telling the State Department whether foreign researchers will have access to export controlled technologies.
“We’ve worked on this legislation, again, for the past few years. We have made lots of compromises and concessions with people who had potential concerns about it. We have come up with legislation that is bipartisan, makes sense. It’s already passed, again, with an overwhelming margin here in the United States Senate. I want to be sure that before we spend billions of dollars more in federal research, which is being proposed, including to the National Science Foundation, that that research can be protected. Who could be against that? Who could be for China being able to have better access to this information? Nobody. Again, a vital component of any competitiveness bill is this commonsense extensively negotiated bipartisan bill, which is already concluded in the homeland security title of USICA. I can’t stress enough the importance of passing this legislation and it should be done on a bipartisan basis because it has been done before. It just makes sense. The broader USICA bill and the CHIPS bill are both important. And to pass the CHIPS legislation is critical right now. It is urgent. And then what we can pass in terms of USICA is also important, but again, if we’re putting more money into research which is being proposed and which I support, it has to be protected. That’s pretty simple and common sense. There’s no perfect bill, but this bill will help keep America’s economy competitive, help keep American jobs here, and grow new, good-paying jobs with good benefits. We should pass this legislation, get it through the House, and take it to the president’s desk for signature. I hope my colleagues will join me in supporting its passage. Thank you and I yield the floor.”
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