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GAO: Prioritizing National Security Could Drive Domestic Semiconductor Production

A new study on semiconductor supply chain risks by the Government Accountability Office (GAO) says prioritizing national security goals might drive greater focus on supporting domestic production.

The semiconductor supply chain is extremely complex and geographically dispersed. Most companies are based in China, Europe, Japan, South Korea, Taiwan, and the United States. The global semiconductor shortage that began in 2020 exposed supply chain problems such as raw material choke points and regional concentration of manufacturing. Further, U.S. policymakers have expressed concerns about the nation’s declining share of global production. Accordingly, the U.S. Senate and House of Representatives have both passed bills aimed at incentivizing construction of new semiconductor manufacturing facilities in the U.S.

The National Science and Technology Council included semiconductors on its February 2022 list of critical and emerging technologies. This list is a subset of advanced technologies that are potentially significant to U.S. national security.

GAO solicited experts’ views on policy options to reduce semiconductor supply chain risks and mitigate future shortages. Experts recommended options ranging from developing the U.S. workforce to improving manufacturing capacity. They emphasized the need to take multiple actions as no single action would suffice, and to prioritize goals and collaborate across agencies. For example, they said prioritizing national security goals might drive greater focus on supporting domestic production.

All 17 experts GAO interviewed agreed on the need to improve workforce development to help strengthen the semiconductor supply chain. However, the experts said that no single policy option would be sufficient and instead recommended implementing a variety of policy options, such as addressing immigration reform and improving supply chain monitoring. 

The experts GAO spoke with discussed the need for identifying federal priorities and improving interagency collaboration in implementing policies to mitigate semiconductor supply chain risks. Some experts also mentioned the necessity of leveraging the expanded roles of the Cybersecurity and Infrastructure Security Agency to establish and operate programs to help semiconductor manufacturers identify and mitigate risks in their systems’

Examples of policy priorities that experts discussed related to semiconductor supply chain risks include national security, economic competitiveness, and increased resilience. Experts stated that identifying the most appropriate policy option depends on the federal priority. For example, one expert said the extent to which increasing semiconductor production in the U.S. is important depends on whether national security is the policy priority. Geographic diversity, including production outside the U.S., might be desirable if economic competitiveness of U.S.-headquartered companies or increased supply chain resilience are priorities. Additionally, experts noted that multiple federal agencies have activities related to semiconductor supply chains and described ways in which improved coordination among agencies would allow the U.S. to act more strategically. For example, one expert said that agencies working on semiconductor issues should identify current activities as well as the need for additional action.

Read the full report at GAO

Kylie Bielby
Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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