AUSTIN, Texas — U.S. Sen. John Cornyn met with Central Texas businesses on Monday morning to discuss the nationwide semiconductor shortage.
Samsung, Dell, Infineon, NXP Semiconductors, BAE Systems and AMD joined the senator from Texas at the Samsung Austin Semiconductor facility to talk about how the chip shortage affects consumers and jobs in Central Texas as well as national security.
Cornyn visited with the businesses prior to a vote in the U.S. House of Representatives on a funding bill for the CHIPS for America Act.
Cornyn authored the CHIPS Act, which went into law on Jan. 1 with the goal of creating new jobs and a stable supply chain in the U.S. The new bill would fund programs created by the CHIPS Act. The bill that would fund the legislation passed the Senate earlier this month.
Cornyn said in a press conference on Monday that China is currently building 17 semiconductor manufacturing facilities, and the U.S. is only building one in Arizona.
“We need to think differently about how we encourage manufacturing of this vital component in our daily lives here in America,” Cornyn said. “Not only will that produce good, well-paying jobs, but it will shore up the vulnerable supply chains that we saw exposed during COVID-19.”
Cornyn said he wants to continue to see the bipartisan support for the bill that was seen in the Senate.
“I hope now we can get this passed in the House of Representatives so we can shore up this vulnerability and make sure that the United States remains the strongest economy and the strongest military power in the world, and it all starts with semiconductors," Cornyn said.
Semiconductor chips are used in nearly all pieces of modern technology including phones, laptops and even missile interceptors. The chips also help program the U.S. military’s F-35 combat aircraft.
During the roundtable with Cornyn, NXP Semiconductors said the automobile industry was the most affected by the shortage. The company said it is "ramping heavily," but faces a capacity gap.
Cornyn said in the press conference that car manufacturers are “playing catch-up” after the pandemic, and semiconductor manufacturers aren’t able to keep up with the demand. These companies need to predict product demand to determine the needed supply months or even years ahead of time.
"This was kind of like the challenge for the 'just in time' expectation from the automotive side versus this long lead time for the microelectronics, which was somewhere between 12 and 24 months if you look into like the investment," Lars Ullrich, the vice president of marketing in the Automotive Division of Infineon, said.
Infineon produces some of its products through a subsidiary in Austin, Cypress Semiconductor. Putting these chips into cars and trucks takes a balance and market anticipation, much of which went out the window because of the pandemic. Cornyn noted the demand for vehicles did not really slow down during the COVID-19 pandemic, but supply did as companies adjusted for how they thought people would respond – buying fewer cars.
"What we have to basically take a look at is the supply chain planning on the semiconductor side is 12 to 24 months," Ullrich said. "If we want to invest right now into something, in new technology, we actually have to take even longer timeframe. From a technology perspective, it could be up to five years. If we were looking from a capacity perspective, we have to start investing now, if we want to have, in three years, a certain technology in the market."
According to Ullrich, the dealerships and the automotive industry usually operate with enough inventory for 70 days. Right now, that's down to 30 days because demand is so high and chip production has dropped so much.
Cornyn also toured Samsung Austin Semiconductor’s Semicon World to find out how the chips are made.
"Where we're sitting today in the middle of a $17 billion facility just in Austin," Samsung said during the roundtable.
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