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How Congress Could Make the Chip Shortage Worse

Americans from all walks of life have been affected by the chip shortage the United States is experiencing. From soaring car prices to low inventory and long lead times for appliances and other consumer goods, few parts of the economy have not been affected by this scarcity of semiconductors.

For leaders in Washington, such chip shortages have also served as a reminder and cautionary tale of the risks of outsourcing vital manufacturing to overseas countries. As a result, President Biden and Congressional leaders have embarked on various initiatives in an attempt to shore up the supply chain and bring semiconductor manufacturing back to the United States.

Recently the House of Representatives passed a piece of legislation known as the COMPETES Act, a massive science and technology bill. While laden with problematic funding for Democratic pet projects, the bill also provides $52 billion to “incentivize private-sector investments and continued American leadership in semiconductor fabrication and will help address supply chain disruptions and ensure that more semiconductors are produced here at home.” Proposed in direct response to the threat China poses to the semiconductor supply chain, this effort complements similar legislation passed in the Senate last summer.  

Unfortunately, other ongoing legislative initiatives may be working at cross purposes with these efforts. Specifically, attempts by Congress to designate PFAS chemicals – a critical component of semiconductors – as hazardous substances through the PFAS Action Act, could make current chip shortages worse and complicate efforts to repatriate semiconductor manufacturing. This heavy-handed, one-size-fits-all measure, which has passed the House of Representatives and is under review in the Senate, could do more harm than good by punishing American consumers and undermining national security.

Proponents of the legislation claim these bans would promote public health, but the science around PFAS chemicals and health risks is far from settled. In fact, a recent review by the Center of Truth in Science of existing research on PFAS substances found that most studies conducted to date “include insufficient data to draw accurate conclusions about the association of PFAS with any specific disease.” Furthermore, the Environmental Protection Agency (EPA), which is tasked with keeping America’s waterways clean, does not mention PFAS chemicals in its primary list of drinking water contaminants. More research must be conducted, and definitive scientific conclusions should be reached before drastic measures like blanket PFAS bans are enacted.

In addition to making consumer products more expensive and harder to find, banning PFAS chemicals would also be bad for American national security. According to Mark Lewis, the head of defense research and engineering modernization, the Pentagon’s “most important investment right now” is in microelectronics, because the United States is “in danger” of losing its edge in this critical field. And while the U.S. may ban PFAS at home, it will not stop other countries from using these chemicals in their manufacturing processes abroad. This would in effect equate to a unilateral disarmament in the ongoing fight for semiconductor superiority.

Take China, for example, which has made promoting its domestic semiconductor industry a strategic technology priority. From 2015-2019 China’s semiconductor manufacturing grew by 50%, and the Semiconductor Industry Association expects this surge to continue. In fact, they predict that the Communist country will account for 28% of global chip capacity by 2030. The United States, meanwhile, has seen its domestic chip manufacturing capacity decline by over two-thirds since 1990, falling to 12% today. Empowering the private sector and lifting regulatory barriers will be critical to reversing this trend and ensuring our national security.

recent announcement by Intel that the company plans to invest $20 billion in a new chip manufacturing facility in my home state of Ohio is an encouraging down payment on the types of investments that will be needed to revitalize America’s semiconductor manufacturing. Industry has been showing similar leadership when it comes to PFAS substances.

When it was determined that two of the nearly 5,000 different types of PFAS in existence – PFOA and PFOS – had the potential to cause adverse impacts, industry started voluntarily phasing out the production of these chemicals. Millions of dollars have similarly been invested by the private sector in remediation efforts and since 2000, the Centers for Disease Control has found that mean blood levels of PFOA have declined by almost 70% and PFOS by 84%. Oftentimes private sector solutions trump heavy-handed governmental politics.

The “trust the science” party is once again rushing to judgment on a public health issue without the existence of sound scientific evidence to justify their actions and without fully appreciating the broad economic and national security implications such a public policy decision could have. More research must be done before any PFAS legislation is considered.

Congressman Bob McEwen represented the 6th District of Ohio from 1981 to 1993 and served on the Select Committee on Intelligence. He was also one of four Republicans on the committee with jurisdiction over all legislation, the House Rules Committee.

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1 comment

  • Well-written article. Besides Intel, other companies, some from Taiwan, are building semiconductor factories in the USA without the need for government subsidies. We all know from the Solyndra Semiconductor scandal, which bailed out top Democrat donors before the company declared bankruptcy, that legislation coming out of the Democrat congress will be political rewards to campaign donors. And, as the article points out, companies are already phasing out the PFAS chemicals deemed problematic. With the Pelosi-Schumer congress: the less legislation, the better.

    Semiconductors are not a manufacturing crisis in any real sense, as supply chain shortages would hamper the factories wherever they are located. Better to focus on ending California’s artificial port blockages by allowing in all trucks (even the non-EVs) to pick up and deliver cargoes, including semiconductors. And end the rail freight pilferage plaguing national rail traffic entering Los Angeles. Would also help to allow in truckers from Canada and Mexico without vaxx mandate restrictions, same as the Biden administration welcomes in unvaxxed and undocumented border crossers and provides free transport nationwide. When government is this inept and corrupt, more money and legislation is not a solution. Stand with the Truckers and Railroads, and the semiconductor shortage will cure itself via free market supply and demand.

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