Are Semiconductors a National Security Issue?

Chi-hung Wei

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As East Asia emerged as the world’s main chip-making hub, the United States’ share of global semiconductor manufacturing capacity has decreased from 37 percent in 1990 to 12 percent in 2021. Despite U.S. dominance in chip design, industry giants including Intel, Micron, Broadcom, Qualcomm, and Texas Instruments produce their chips overseas or contract out production to companies abroad. The lack of manufacturing capability, together with the current chip shortage, has prompted U.S. leaders to treat semiconductors as an essential element of national security, especially in the context of tense China-U.S. relations. In March 2022, for example, President Joe Biden referred to semiconductors as “so critical to our national security… that we’re going to create rules to allow us to pay a little more for them if they’re made in America.” Similarly, Senate Majority Leader Chuck Schumer said, “semiconductor manufacturing is a dangerous weak spot in our economy and in our national security.”