Pentagon steps into Senate chip debate, citing national security

Pentagon officials are pressing lawmakers to back legislation to fund the domestic production of semiconductor chips, arguing it is essential for national security.  

Ahead of a crucial vote in the Senate, the Department of Defense is lobbing members in both parties to back the bill by arguing it will help the U.S. keep up with China and other nations heavily investing in their own semiconductor industries.  

The chips are important to the Pentagon, as they can be found in every weapons system. For example, each Javelin missile the U.S. sends to Ukraine includes about 200 semiconductors. 

The bill faces an uncertain path in the Senate, where it will probably need more than 10 GOP votes to pass the chamber.  

Sen. Bernie Sanders (I-Vt.) on Friday threatened to vote against the bill, which he described as a “blank check to chip companies,” and other progressives are likely to join him. 

Senate Minority Leader Mitch McConnell (R-Ky.) earlier this month threatened to upend the Creating Helpful Incentives to Produce Semiconductors (CHIPS) in America Act unless Democrats backed off their separate push on a budget reconciliation measure. But he has signaled openness on the merits of the bill, and the reconciliation package appears to have been torpedoed by Sen. Joe Manchin (D-W.Va.).

The push by the Defense officials could nudge some Republicans toward the bill.  

The House has already passed the America COMPETES Act, and the Senate has passed the U.S. Innovation and Competition Act, both of which are aimed at making the U.S. more competitive with China. Those two bills are now in limbo, and the narrower CHIPS bill is seen as a way of doing something on the issue.  

Senate Majority Leader Charles Schumer (D-N.Y.) last week told senators to expect a floor vote as early as Tuesday on the CHIPS bill, which would allocate $52 billion to $54 billion in assistance to the industry. 

In a letter to congressional leadership last week, Defense Secretary Lloyd Austin and Commerce Secretary Gina Raimondo said in part that “immediate passage” of the bill would “revitalize the domestic semiconductor manufacturing industry and enable game-changing capabilities our war-fighters need.” 

“We agree that the manufacturing of semiconductors is an imperative for our national security,” the secretaries wrote. “For the last several months, our departments have been working together to further define these needs so that we can quickly support them through funding the CHIPS Act.” 

Raimondo then teamed up with the Deputy Secretary of Defense Kathleen Hicks and Director of National Intelligence Avril Haines to brief members of Congress on the national security need for the legislation. 

“Right now, we have a reliance on foreign suppliers of semiconductors, which are critical to basically all of our defense products,” said Cynthia Cook, director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies (CSIS). 

“So, the real issue is assuring that industry has access to the semiconductors it needs for its production, and in a secure way,” she added. 

The semiconductor shortage has been a “longstanding” issue for the Pentagon, said Martijn Rasser, a senior fellow and director of the Technology and National Security Program at the Center for a New American Security. 

“I think particularly for the department, it’s challenging because on one side, they rely on some very specific cutting-edge chips that are not commonly made,” Rasser said. 

“But then they also have a heavy reliance on legacy chips. So, things that commercial enterprises don’t really continue to invest in just because it’s older technology,” he added. 

Kea Matory, legislative director for the National Defense Industrial Association, said a number of national security concerns come to the forefront from the semiconductor shortage.  

One major concern is what would happen to U.S. capabilities if China were to invade Taiwan — a major producer of semiconductors. 

Adding onto those concerns are the ongoing supply disruptions caused by the pandemic, and demand for U.S. weaponry caused by Russia’s invasion of Ukraine. Onshoring domestic production of chips will take multiple years. 

“All of these are concerns when it comes to national security and the fact that we really need to stockpile and bring up some of our supplies,” Matory said. “I mean, we just can’t keep up with demand is part of the challenge.” 

Moving forward, experts say more would need to be done to help boost the semiconductor industry in the long term. 

“These are large, big investments and good ideas, but you know, there will be new technologies, there will be new chips, there is a need to think about how we do industrial policy, these issues longer term,” said Gregory Sanders, deputy director of the Defense-Industrial Initiatives Group at CSIS. 

“This is ultimately a level of just knowledge and technical expertise, data that will be a persistent challenge,” he continued. “And we need that capability of U.S. government to make wise decisions on how we spend this money going forward.” 

Matory said the bill wouldn’t fix every issue overnight, but that waiting to deal with these problems will only create more problems. 

“Is it going to fix our problem today? You know, probably not, because we do have to build those foundries” she said. “But at least if we’re starting it, you know — if we keep kicking the can down the road, we’re gonna have, you know, a bigger problem.”