White House: The US must be Relevant Against China in SMEs

At an event hosted by AT&T last week, key members of the Biden Administration offered an update on Capitol Hill and Administration activity to address ongoing semiconductor supply chain and ICT issues.

Speakers included Sreenivas Ramaswamy, Senior Policy Advisor, Office of the Secretary at the Department of Commerce; Peter Harrell, Senior Director for International Economics and Competitiveness, White House National Security Council; and industry leaders such as:

  • John Neuffer, President & CEO, Semiconductor Industry Association
  • Robert Hoffman, Head of Government Affairs, Broadcom
  • Michael Petricone, Senior Vice President, Government Affairs, Consumer Technology Association (CTA)
  • Jayne Stancavage, Global Executive Director of Product & Digital Infrastructure Policy, Intel Corporation
  • Bruce Stokes, Non-Resident Transatlantic Fellow, The German Marshall Fund of the United States

Sreenivas Ramaswamy took the bulk of questions explaining the importance of chip production, the bipartisan nature of funding our domestic supply chain, and the ways in which the government is looking to work multilaterally. When asked about China’s intentions in the semiconductor manufacturing equipment (SME)  space, Ramaswamy noted “they [China] are concerned about their position in supply chain and their vulnerability. And they’re taking action to make huge investments, both in terms of advanced technologies and the innovation and the software and everything else that goes to that.” He emphasized that the U.S’s strategy against China must be focused on our domestic industry. “To the extent that what’s coming next may be coming out of China, we need to be relevant…The whole ‘protect and promote’ side of the equation is very much in play when it comes to trade in China.”

The largest takeaway from the event was the obvious burden that those from the White House were putting on lawmakers to pass the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS Act). “We are doing everything we possibly can to get CHIPS Act across the finish line before the end of the year,” said Peter Harrell stated.

Finally, all panelists emphasized that the supply chain shortage that the SME industry is seeing right now is “not just a blip” and serious action needs to be taken to both compete with China and shore up this foundational technology. While the U.S. retains some preeminence in chip design and SME, the U.S. has been losing the capability to manufacture semiconductors for some time, notes a China Tech Threat report that was co-written with the Center for a Prosperous America (CPA). This has been driven in part by U.S. firms empowering China with state-of-the-art tools and the lax enforcement of export controls.

At the end of October, Republicans on the House Foreign Affairs Committee, led by Rep. Michael McCaul (R-TX), wrote a letter to Commerce Sec. Gina Raimondo, calling for the “strengthening of export controls on semiconductors.” This is not the first time Rep. McCaul in particular has urged the Commerce Department to get tougher as it relates to China. Over the summer, he and Sen. Hagerty urged Sec. Raimondo to add YMTC to the entity list, describing it as “the PRC state-owned national champion for memory chips with ties to the CCP military.”

For more information on this topic, please refer to China Tech Threat’s designated page: https://chinatechthreat.com/semiconductors/