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Gina Raimondo warns U.S. needs to secure future for chip industry

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Gina Raimondo, Commerce Secretary, testifies in front of a Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies hearing on Capitol Hill, Washington, D.C., U.S.A, February 1, 2022.

Andrew Harnik | Reuters

Gina Raimondo (U.S. Commerce Secretary) urged Congress on Wednesday to adopt the CHIPS for America Act, in order to ensure national security as well as the future economic growth.

The legislation aims to encourage investments in U.S. semiconductor production, research and development, supply chain security and supply chains.

The following are some examples ongoing global shortage of semiconductor chipsIt has caused damage to a variety of industries, including the automotive industry.

The CHIPS (Creating Helpful incentives to Produce Semiconductors for America Act) for America was passed January 20, 2021. However, Congress has yet not to pass a bill which would allocate resources for the various programs despite bipartisan support for growing domestic chip manufacturing capabilities.

Raimondo said that it was a national security concern and suggested that we should make chips in America instead of friend-shoring. Raimondo spoke exclusively to CNBC at Wednesday’s World Economic Forum, Davos (Switzerland).

In April, Treasury Secretary Janet Yellen explained that “friend-shoring” is the practice of working with countries who adhere to a certain set of values and norms about the operation and management the global economy.

Raimondo and President Joe BidenThe commerce secretary visited the Samsung South Korean facility last week. It is the biggest in the world.

“If Congress does not pass the CHIPS Act quickly and efficiently, then we will lose that opportunity. Intel, Micron, Samsung – they’re growing, they’re going to build future facilities,” she said.

“If Congress fails to act fast, they won’t be building them in America.” We risk being left behind if they continue building them in Asia or Europe.

According to The Congressional Research Service, the motivation for the bill is a gradual decline in U.S. semiconductor manufacturing capacity. It fell from 40% in 1990, to around 12% by 2020. Congressional Research Service.

Gregory Arcuri, a research assistant with the Renewing American Innovation Project at the Center for Strategist & International Studies, explained in a January blog post that the high costs and complexity of chip manufacturing led many U.S. semiconductor firms to transition to a “fabless” model.

Arcuri explained that this meant “maintaining higher-value design elements to new, more powerful chips, while outsourcing their fabrication elsewhere, primarily in East Asia which now hosts nearly 80% global chip fabrication.”

China-Taiwan threats

Taiwan has a significant source of U.S. Imports, and is home to a number of manufacturers. TSMCOnly estimated that it accounts for almost 90% of chip productionFor U.S. tech giants such as Apple, AmazonAnd Google.

Raimondo highlighted, however, the threat that the tech sector faces from commercialization.

America buys 70% its most advanced chips from Taiwan. These are chips used in military equipment. A javelin launch system contains 250 chips. Do you want all of that to come from Taiwan? Raimondo explained that it isn’t secure.

“Pass the Bill, Congress. We need to pass CHIPS. Now let’s move on to making chips in America. This will help us secure our future.

Tensions between China, Taiwan and Taiwan pose a further threat to the existence of humanity. Taiwan is a democratically-governed island Beijing regards as part its territory.

President Biden on Monday said he would be willing to use military forceBeijing reacted sharply to Taiwan’s defense in case of invasion by China.

Raimondo answered a question about possible impacts on the semiconductor industry if a conflict were to occur. He said it was “not an attractive picture”, and that it was “downright terrifying and unsustainable.”

Some things are more valuable than the price. “You can’t place a value on America’s security,” she stated.

“The fact that we’re buying two thirds of our chips from Taiwan and these are the chips we need to keep Americans safe and secure — we’ve got to make those in America, period.”

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