Semiconductors

Floor Speech

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Mr. CORNYN. Madam President, as we all know, in recent years, China has emerged as one of the greatest competitors to the world order. Unfortunately, they don't play by the same rules that the rest of the international community plays by. The Chinese Communist Party is increasingly aggressive and well-resourced and has made no secret of its intent to gain more influence and power.

For everything from national security to economic policy, there is a clear and urgent need to reorient the way our country views and responds to the challenge from China. I am glad the Senate is taking up an important step today through the U.S. Innovation and Competition Act. The cornerstone of this legislation, of course, is funding to bolster domestic semiconductor manufacturing so the United States can compete with China and secure some of our most critical supply chains.

Nearly 90 percent of the semiconductors made in the world are made by countries in Asia, with Taiwan dominating the market with about 63 percent of that total of 90 percent. In fact, one company, Taiwan Semiconductor Manufacturing Company, accounted for more than half of the total foundry revenues last year. As I said, companies in Taiwan control 63 percent of the advanced semiconductor markets.

If for any reason that supply chain was cut off, it would lead to very serious consequences across our entire economy. To address this, Senator Warner, the senior Senator from Virginia, and I introduced the CHIPS for America Act last year to shore up domestic semiconductor manufacturing and reduce our alliance on other countries for one of our most critical products. Semiconductors go into everything with an off and on switch.

The United States is not the only country that spotted this blinking red light, this danger signal. Other countries have recognized the immense risks that exist, and they are also pouring billions of dollars into new foundries. The European Union, for example, is investing up to $35 billion, South Korea is investing $65 billion, and China is investing a whopping $150 billion in semiconductor manufacturing. Our competitors are pouring tens of billions of dollars into boosting their own supplies of these essential semiconductors, and the United States needs to keep up and compete.

The vast majority of our colleagues agree that this was an important and critical task. It was carefully crafted in monthslong, bipartisan, bicameral negotiations, and, in fact, this legislation was adopted as an amendment to last year's Defense Authorization Act by a vote of 96 to 4. Now, though, it falls to us to fund what we authorized in the Defense authorization bill, and there is just one issue standing in the way.

During committee consideration of the Endless Frontier Act, an amendment was adopted that would apply controversial and unnecessary prevailing wage language to the CHIPS for America Act. The prevailing wage provision creates an obstacle to our funding the CHIPS for America Act, and it confers zero benefit on anybody because the manufacturing of semiconductors is a very sophisticated, well-paying business.

Considering the current wages of U.S. semiconductor manufacturing companies, there is zero impact on workers' wages by requiring companies to pay an elevated, so-called prevailing wage. So it is really a nonissue. However, these Davis-Bacon provisions also represent an unprecedented expansion of a partisan labor policy, and applying them to private construction projects, as I said, sets a troublesome precedent.

Leaving this language in the bill has the potential to dramatically weaken support for this essential broader legislation, and I hope we can all agree that the stakes are simply too high to let that happen. I have introduced an amendment to strike this unnecessary and divisive provision and to maintain the strong bipartisan support that the CHIPS for America Act has earned so far. This partisan provision has no impact on workers' wages, and it should hardly be a reason to forfeit the strong bipartisan support the CHIPS Program has previously received.

It is important that we send a clear and distinct and unequivocal message to our competitors and rivals in China. Republicans and Democrats have worked together to bolster domestic semiconductor manufacturing and to confront one of our biggest looming threats from China. Now is not the time to sacrifice the progress we made.

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