‘It’s absolutely critical.’ Ex-Trump official backs Biden’s computer chip push

Lisa H. Shelton March 26, 2022 3 minutes read

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“It’s absolutely critical,” McMaster, a retired Army lieutenant general, told CNN in a phone interview. “If China has a lock on supply chains relating to economic prosperity or our security, that’s a really bad thing.”

McMaster participated in a bipartisan Commerce Department event Monday where national security officials urged lawmakers to pass the Bipartisan Innovation Act, which would invest $52 billion in domestic semiconductor production and advanced manufacturing. The event included former Trump officials Matthew Pottinger and Bonnie Glick, and highlighted how members of both administrations have found agreement in the need to compete aggressively with China.

“Supply chains that have been biased in favor almost exclusively of efficiency and low-cost have to be shifted in favor of resilience,” McMaster said in the interview.

An epic shortage of computer chips has helped drive up the cost of consumer electronics and caused record price spikes on new and used cars. High car prices are contributing to the worst inflation in 40 years.

Just 12% of the world’s computer chips are made in the United States today, compared with 40% in 1990, according to the Commerce Department. Almost all — 90% — of the most sophisticated chips are made outside the United States.

The computer chip shortage is so severe that Ford recently announced it will start shipping Explorers without all the parts.

Russia’s invasion of Ukraine threatens to pile further pressure on the semiconductor supply chain. Ukraine is a major source of neon, a key ingredient for making computer chips. Earlier this month, two leading suppliers of neon in Ukraine halted their operations amid the war there.

Even before Russia invaded Ukraine, a Commerce Department report warned that some manufacturers that rely on semiconductors had less than five days’ worth of inventory.

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Confronting China

McMaster, now a senior fellow at Stanford University’s Hoover Institution, worries the war in Ukraine will give Beijing another opening to make the United States and the West more dependent on China for critical goods — this time, through semiconductors.

Commerce Secretary Gina Raimondo shares some of those concerns.

Ukraine halts half of world's neon output for chips, clouding outlook

“Our competitors like China are racing to support their semiconductor industries and they aren’t waiting for us to catch up,” Raimondo said at the Commerce event. “Every day we wait is a day we fall further behind.”

China has made it part of its long-term plans to invest in boosting semiconductor capabilities, making it less dependent on providers abroad.

McMaster called on Republicans and Democrats to set aside their differences to invest in US semiconductors.

“Stop compromising important national security interests to score partisan political points,” he said. “If there is one area of bipartisan agreement, it’s on the threat from China’s communist party. There is a heck of a lot more continuity than change in the Trump and Biden administrations there.”

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