The United States needs to diversify its technology supply chain in order to maintain its technological advantage and keep some technologies out of the hands of the Chinese Communist Party, top government officials told members of Congress on Wednesday.
During a House Foreign Affairs Indo-Pacific Subcommittee hearing on Jan. 17, witnesses stressed the need for protecting critical emerging technologies – such as semiconductors – in order to preserve peace and stability in the Indo-Pacific.
“We have to avoid a situation where U.S. investments are supporting Chinese military modernization,” said Thea D. Rozman Kendler, the assistant secretary for export administration at the Department of Commerce’s Bureau of Industry and Security. “We cannot permit the intelligence, the military technology of China to be built on U.S. funding – that would undermine our national security and foreign policy interests.”
Notably, Rep. Gerry Connolly, D-Va., brought up the fact that Taiwan manufactures the majority of the world’s semiconductors, producing about 90 percent of the most advanced memory chips in the world.
The congressman asked the witnesses whether or not this technology is at risk due to Chinese aggression.
“I think like so many other supply chain issues, we need to better understand how did this happen? I mean, this is American-invented technology that migrates to Taiwan because we weren’t willing to put the resources in,” Rep. Connolly said. “But we have to plan for the what ifs, and China is making no secret of its designs.”
Nate Fick, the head of the State Department’s Bureau of Cyberspace and Digital Policy (CDP), told the congressman that the United States is working closely with its Taiwanese counterparts in an unofficial capacity to transfer to them lessons learned from other places such as Ukraine. These lessons, he said are to help strengthen deterrence and “maintain the status quo.”
“We recognize the importance of Taiwan’s unique role in the global economy because of the concentration of semiconductor manufacturing,” Fick said. “I think we’re taking comprehensive steps to diversify that supply chain outside Taiwan – part of it in the United States part of it in friendly countries.”
“We are clearly trying to buy as much time as we can in order to develop and mature those alternatives, and that involves strengthening deterrence,” he added.
C.S. Eliot Kang, the assistant secretary of the State Department’s Bureau of International Security and Nonproliferation, added that the CHIPS and Science Act is one way the United States is looking to do just that, as “the whole idea is to diversify the supply chain.”
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
“I think this is where congressional leadership is paying out,” Kang said. “In regard to packaging and other even legacy chips, we’re trying to have them in the hands of our friends and allies. So, this is again because of the foresight bipartisan support of Congress.”
Subcommittee Chairwoman Young Kim, R-Calif., agreed with the witnesses, saying, “we cannot allow the Chinese Communist Party to dictate how critical and emerging technologies are developed and used.”
“It is therefore of the utmost importance that we invest in our own technological base, that we ensure all U.S. developed technology is protected, that the U.S. and like-minded allies and partners are setting the rules of the road for the use of technology worldwide, and that we are able to jointly develop and manufacture critical technologies efficiently,” Rep. Kim concluded.
