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After months of delay, lawmakers appear to be in the final stages of negotiating a $52 billion package of chip manufacturing and research subsidies to boost competitiveness with China.
Senate Intelligence Committee Chairman Mark Warner (D-VA) stressed that more U.S. tech companies will move semiconductor manufacturing plants overseas if Congress doesn’t pass legislation soon.
“Will we get it done? Yes,” Warner recently told Yahoo Finance during an interview through the Atlantic Council. “We need to get it done and get it to the president’s desk before August comes because if not, a lot of these decisions by American and other companies — they’re going to build elsewhere.”
Warner cited the news that chip giant Intel (INTC) recently delayed the groundbreaking for its new facility in Ohio as one example of companies becoming frustrated by uncertainty over the chips bill.
The U.S. would be vulnerable to changes in Chinese policy and national security risks without significant investment in the semiconductor industry, he added, given the "mother lode" of chip manufacturing occurring in Taiwan.
Taiwan Semiconductor (TSM), or TSMC, dominates the global chips market with over half of the total foundry revenue. Should China move to block Taiwan's production, the ramifications could be economically devastating.
“It would not even take the Communist Party of China taking over Taiwan,” Warner said. “If they simply put some level of blockade on it that stopped the flow of these chips coming out of Taiwan to America and to other Western nations, you could create a worldwide recession, potentially depression, because we are so reliant on the production capabilities coming on Taiwan.”
Warner added that the U.S. needs to “stand by Taiwan, but we also need to make sure that we continue to incentivize [Taiwan Semiconductor] to build five or six plants in America. They’re not going to do that unless we can get this legislation to President Biden’s desk.”
TikTok 'a huge concern'
Warner also weighed in on another national security concern between the U.S. and China: TikTok data privacy.
Warner and Sen. Marco Rubio (R-FL), the top Republican on the Senate Intelligence Committee, recently called on FTC Chair Lina Khan to investigate TikTok for alleged deceptive practices after BuzzFeed reporting indicated that Chinese engineers at parent company ByteDance were accessing U.S. users' data.
“The truth is that Chinese law requires any Chinese-owned company to give data to the Communist Party of China,” Warner said. “In the world of big data and artificial intelligence, the enterprises that have the most access to data will be winners. And if the Chinese Communist Party is scraping off all the literally millions of Americans or billions of people who use TikTok — all of that data into their data storage areas —that’s a huge concern.”