Commerce Minister Gina Raimondo warned on Wednesday that the country’s current reliance on foreign computer chip manufacturing puts it at risk of recession if it is ever stopped. Her comments came as Congress nears a vote on a US semiconductor manufacturing funding bill.
Although many computer chips are developed in the US by companies such as IntelRaimondo told CNBC’s Sarah Eisen on air, “Closing Call‘The environment that the place of production is equally important.
“If you allow yourself to imagine a scenario where the United States no longer has access to chips that are currently made in Taiwan, that would be a frightening scenario,” Raimondo said. “This is a deep and immediate recession. It is the inability to protect oneself by producing military equipment. We need to do this in America. we will simply be too dependent on other countries.”
The CHIPS Act, worth more than $50 billion, will help subsidize the establishment of semiconductor manufacturing plants in the US.
Computer chips are used in a range of Internet-connected devices, from smartphones to medical devices and cars.
The bill, which cleared a procedural hurdle in the Senate on Tuesday but still must pass both houses, has support on both sides of the aisle, although some legislators questioned the need to subsidize companies who were engaged in share repurchase. The bill now includes ban to use the funds for buybacks or dividends.
The semiconductor industry actively lobbied for the passage of the bill, and Intel warning The planned Ohio plant, which she said will initially invest $20 billion, could be delayed by any delay from Congress.
Raimondo responded to criticism of the industry’s large funding by calling semiconductors “the cornerstone of the technology needed to support any other innovation-driven industry.”
She added that the country’s heavy reliance on foreign chip manufacturing, as she said 90% of advanced chips are sourced from Taiwan, poses a national security threat.
She said it’s also important to provide incentives for companies to expand U.S. chip manufacturing, rather than entice them to invest in other countries that might offer attractive benefits.