Analysis

The US Is Losing Control Of A Crucial Technology Used By Nearly Every American

(Justin Sullivan/Getty Images)

Varun Hukeri General Assignment & Analysis Reporter
Font Size:

Microchips are used in just about every modern technology from cars to smartphones. But manufacturers are concerned about a production shortage as supply chains have shifted away from the United States to Asia.

Intel CEO Pat Gelsinger expressed concerns during a 60 Minutes interview Sunday that supply chain disruptions and the rise of Asian chip manufacturing threaten domestic production. He noted that Asia accounts for nearly three-quarters of chip manufacturing while U.S. production has gone down.

“This is a big, critical industry and we want more of it on American soil,” Gelsinger told CBS. “The jobs that we want in America, the control of our long-term technology future, and as we’ve also said, the disruptions in the supply chain.”

WATCH:

He also said the U.S. once accounted for 37% of global chip manufacturing around 25 years ago, but now only 12% of the world’s chip manufacturing takes place in the U.S.

“It doesn’t sound good,” he said. “And anybody who looks at supply chain says, ‘That’s a problem.'”

Intel is the largest U.S. chipmaker and produces microchips in advanced manufacturing facilities known as fabrication plants. Chips are made using a thin piece of silicon dioxide called wafers. Silicon is a semiconductor material, which means it can both conduct electrical currents or block them. (RELATED: Biden Admin Targets Seven Tech Companies Charged With Helping China’s Military Develop Supercomputers And WMDs)

Intel has lobbied the federal government for years in an attempt to revive chip manufacturing in the U.S., according to CBS News. Other manufacturing hubs like Taiwan and Israel have bolstered their microchip industries through financial incentives including tax breaks and subsidies.

The COVID-19 pandemic sent microchip demand soaring and domestic manufacturers have been unable to keep up with rising demand, according to Reuters. Manufacturing output declined 2.68% last year because of supply chain disruptions mostly attributed to the pandemic.

A 45nm process 300mm silicon wafer is displayed at a press conference as Intel Japan announces the launch of the new 45nm process microprocessors, Xeon processor for servers and Core2 Extreme processors for desktop PC, in Tokyo 13 November 2007. The new processors have improved power efficiency and performance compared with current 65nm processors. AFP PHOTO / Yoshikazu TSUNO (Photo credit should read YOSHIKAZU TSUNO/AFP via Getty Images)

A 45nm process 300mm silicon wafer is displayed at a press conference as Intel Japan announces the launch of the new 45nm process microprocessors (Yoshikazu Tsuno/AFP via Getty Images)

The Intel CEO said his company’s biggest stumble occurred in the early-2000s when Apple’s former CEO, Steve Jobs, introduced the iPhone. Intel brushed aside the emerging smartphone industry and Apple ultimately went to the Taiwan Semiconductor Manufacturing Company (TSMC) for chips.

TSMC is the world’s most advanced chipmaker and produces chips that are at least 30% faster and more powerful than Intel’s, according to CBS News. TSMC announced in early 2021 that it would invest $100 billion into increasing capacity at its plants over the course of three years. The announcement came days after Intel announced it would spend $20 billion to build two new manufacturing plants in Arizona.

But Intel and other U.S. chipmakers aren’t just competing with Taiwan.

China’s latest five-year economic plan boosts research and development (R&D) for microchips and other “frontier technology,” which could make China more competitive against Intel and TSMC in the future, according to Bloomberg.

The development of microchips is “crucial” to the country’s economic development, China’s science and technology minister Wang Zhigang said at a press conference in February.

China currently imports around $300 billion of chips annually. However, its leaders are starting to promote more domestic manufacturing amid the current global shortage in microchips and an increasingly hostile business relationship with the U.S., according to Bloomberg.

Former President Donald Trump issued an executive order in November 2019 enabling the Commerce Department to shut down technology-related transactions with Chinese entities that might pose a national security threat. The move expanded the blacklisting of Chinese tech giants including Huawei, ByteDance and Tencent. (RELATED: DOJ Charges Chinese Businessman With Attempting To Steal Trade Secrets)

President Joe Biden reportedly plans to keep the Commerce Department rule. Biden has also framed his China strategy as a battle against “techno-autocracies,” according to Bloomberg.

WASHINGTON, DC - FEBRUARY 24: U.S. President Joe Biden holds a semiconductor during his remarks before signing an Executive Order on the economy in the State Dining Room of the White House on February 24, 2021 in Washington, DC. (Photo by Doug Mills/Pool/Getty Images)

President Joe Biden holds a semiconductor during his remarks at the White House on February 24, 2021 (Doug Mills/Pool/Getty Images)

The White House has said a number of Trump-era actions on China remain “under review,” and the president has faced criticism from some Republicans for his administration’s slow review of specific policies, according to Reuters.

Industry executives at Intel, Qualcomm and other chipmakers wrote a letter to the White House in early February urging the president to push for “substantial funding for incentives for semiconductor manufacturing,” Bloomberg reported.

Biden has since taken executive action aimed at restoring U.S. supply chain security, with an emphasis on semiconductors. He also pushed for $37 billion in funding to boost R&D and chip manufacturing capabilities, Reuters reported.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel