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“ENDLESS FRONTIER ACT--Continued” mentioning Marco Rubio was published in the Senate section on pages S3187-S3189 on May 20.
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The publication is reproduced in full below:
ENDLESS FRONTIER ACT--Continued
The PRESIDING OFFICER (Ms. Cortez Masto). The Senator from Virginia.
S. 1260
Mr. WARNER. Madam President, I rise today in strong support of the Endless Frontier Act--a long overdue, bipartisan effort to invest in our country's innovation and competitiveness.
I am pleased to see that Congress is finally taking action to shore up U.S. investment in the research, development, and manufacturing of critical technologies because, without this kind of intervention, China in particular will continue to outpace and outperform us in the global technology race, impacting our country's economic well-being, our global influence, and our national security.
Let me note, when I reference China, I think it is important that any policymaker or business leader draw this distinction. I want to make clear that my beef is with the Communist Party of China and the policies of President Xi Jinping, which persecutes its own people in terms of Uighurs, restricts the freedom of the people of Hong Kong, and creates a surveillance state that would make George Orwell blush. My beef is with those policies and that party, not with the Chinese people and obviously not with the Chinese diaspora, particularly Chinese Americans and Asian Americans.
In recent years, China has rapidly been executing on a plan. It has been working, particularly, to ramp up its domestic industries around technology that confer potentially to its long-term strategic dominance in a whole host of industries that traditionally the United States or the West has dominated.
One of the topics I am going to come back to in a moment is that of semiconductors. China consistently increases its investment in the semiconductor industry, with a commitment to invest $150 billion and a goal to produce at least 70 percent of the semiconductors it consumes--
it is one of the world's fastest growing economies--by 2030.
Frankly, on this issue of semiconductors, it is not just China. Look around at South Korea, which has pledged to invest over $130 billion over the next 9 years, while training 36,000 new microelectronics engineers and technicians. Even our allies in Europe--Germany and 18 other EU members--recently announced investments of up to $60 billion in key hardware like semiconductors over the next few years.
We look back and see how we are doing in America. By contrast, over the past 10 years, only 17 major semiconductor fabs, or foundries--
these are basically the manufacturing facilities--have been built in the United States, while we have seen over 122 built elsewhere. As a matter of fact, right now, there is not a single new fabrication facility being constructed in America. The total number of facilities--
fabs, foundries--that are in production has gone from 81 down to 76, which are some of our older fabrication facilities.
Frankly, the technology has leapt forward, and if you don't continue to make the investment, you end up with a large, empty facility. We even have one right outside of Richmond, in Henrico County.
As a country, our share of semiconductor and microelectronic production has gone from 37 percent to just 12 percent today. If you look at China, it is almost the exact inverse, going from single digits to north of 30 percent.
The truth is, in the United States, the cost of a new fab is about 25 to 50 percent higher, partially because of the lower financial incentives we provide and the appropriate environmental standards. It does mean that, without incentives, we are not going to be in the game right now, partially because of decisions made right at the beginning of COVID and partially just because of a semiconductor shortage. We have auto factories sitting idle in the United States, not because they don't have workers, not because they don't have demand for those automobiles, but because these plants can't obtain the semiconductors that are integral to automobiles and, for that matter, every device we operate.
At the same time, if we look back again at China, it has no plans to take the foot off the pedal anytime soon. As a matter of fact, last year, President Xi Jinping announced a $1.4 trillion commitment to develop new technologies just through 2025--$1.4 trillion. We think about the numbers we are talking about here today, which are big based upon traditional American standards, but they pale in comparison to what China is investing. You don't need to look very far; you only need to look at the Chinese documents themselves--the Made in China 2025 plan and the China 2035 plan in terms of standards and procedures and protocols.
Beyond semiconductors, 5G, and some of the things I have talked about in the past, there is a host of other areas in which, if we don't invest, we are not going to be able to stand.
Now, it is not all bleak. U.S. semiconductor firms in areas like lithography, packaging, and metrology still lead the world. In machining, we still lead. However, many of the key ingredients to our success, including Federal support for R&D, investment in basic research, and support for advanced manufacturing, have actually declined over the last 20 years.
Simply put, we are just not keeping up. Between 1995 and 2018, Chinese R&D investment increased by over 15 percent per year compared to the U.S. increases averaging about 3-percent growth per year. Now, we started with a higher base--I acknowledge that--but on relative and, shortly, on actual real terms, China will soon pass. As a matter of fact, after World War II, the United States funded 69 percent of the annual global R&D. Today, we fund less than 28 percent, with only 7 percent going to nondefense technologies--again, like wireless, which is something I know a little bit about and will speak to again in a moment.
To get back to where we once were and reassert U.S. technology leadership, we need to reprioritize foundational technologies to maintain not just our country's economic leadership but to also make sure that our values are built into these increasing technology areas.
The truth is, for so many years, not only did we invent many of these breakthrough technologies here, but even if we didn't invent them in the United States, we would then set the rules, the procedures, the protocols, and the standards around these new technology developments. We have seen that in semiconductors for a long time. We saw it in computing. We saw it with the internet. We saw it in wireless. We saw it in satellites.
Time and again now, we are suddenly seeing China flood the zone with these standard-setting bodies, and when you set the standards, you also reflect your values. So values that we bring to the table, like transparency and respect for human rights, go out the window when China sets the rules around 5G that basically allow traffic to always pass through Beijing. Even if you are making a phone call between St. Louis and San Francisco, why does that traffic have to be routed through Beijing unless there is a malicious interest at stake? If you set the rules, you drive not only the technology but so many other things.
As chairman of the Senate Select Committee on Intelligence, I have long been banging the drum about the way the PRC has taken advantage of what makes our country's economic system so great--our openness, our transparency, our free markets.
The Chinese Government, unfortunately, plays by a different set of rules. The Chinese Government starts with the willingness to use all the tools of its intelligence services, sometimes its student population, which has added so much value to our country, and enormous thefts of intellectual property. Some public estimates are north of
$500 billion a year.
The Chinese Government, as well, is using all aspects of its society to increase China's dominance, from the intellectual property theft that I talked about to opaque subsidies in financing that always favor a Chinese vendor.
And, unfortunately, for many of our trading partners, the deal that is offered by the Chinese firm is often either too good or linked to another development--``I am going to build you a road; I am going to build you a port, but you have to buy at Huawei, as the price of that,'' or because we in America or, for that matter, even in the West have not kept up on a financing basis.
That is why in the Endless Frontier bill that we are debating right now, a bill that will make substantial investments in the National Science Foundation and the Department of Energy, our National Labs--
both great national assets--in this bill, as well, we are actually doing more than authorizing new ideas and new advancements. We are actually finally--finally--putting our money where our mouth is.
It is why included in the Endless Frontier bill is the Utilizing Strategic Allied Telecommunications Act, which, at the end of the day, is basically $2 billion to invest in making sure that in America we have, and in the West we have, a competitor against Huawei.
I have come to this floor and talked a lot about the national security threat Huawei presents in America and, for that matter, to our allies.
But if you don't have a competitor priced on a fair basis, what do you expect to do? What do you expect of an ally country to do? Or for that matter, what do you expect of many of the rural telecos' decision, which was to buy Huawei equipment, until this vulnerability got exposed.
On this bill I was proud to work with two of my great partners on the Intelligence Committee, Senator Richard Burr and Senator Marco Rubio.
What we do with this $2 billion is put up a public wireless supply chain innovation fund to spur investments toward open architecture, innovative, leap-ahead technologies in our domestic mobile market.
And what we are really talking about doing--and I know I have talked to the Presiding Officer about this and others--is, in 5G, we are almost so far behind at this point that we have to leapfrog ahead. But one way we can leapfrog ahead is by developing what is called open RAN, or open radio access network. What does that mean in English? Well, it means let's move away from the traditional hardware-based stack of the telephone wireless system and move to a more software-based system.
When we do that, we get away from the inherent advantages that the Chinese and Huawei have, and we move to an area where there are a host of American and other enterprises that are software-based, where we are already far ahead.
Now, what we also have to do, as well, is combine this investment--
and we have close to $500 million on this--to also invest in a multilateral fund.
The truth is, no single American company on its own can take on this enormous challenge that the whole Chinese state, backing their Chinese champion--there is no way we can take that on, on our own. So how do we think, with our other democratic allies around the world, the G7, but also countries like South Korea, Taiwan, Singapore and India, Israel, and others, that we can collaborate on this technology development? Think about how we compete on an economic basis and at the same time make sure that we install those values around transparency, respect for human rights, the notion of open and competitive system, that those are built into technology development.
The second item is crucially that this bill also addresses the essential need for us to invest in semiconductors. We are finally putting our money where our mouth is. This bill will appropriate on an emergency basis $52 billion for investment in chips in our country and along with our allies.
This basically builds upon legislation that we added to the Defense authorization bill last year. It is bipartisan. Senator Cornyn, Senator Schumer, Senator Cotton, Senator Kelly are all working together on this with a host of others because the semiconductor industry, while we have seen some sliding, still represents one of the shining lights of our country's innovation economy.
And as a wider array of products and services depend on internet connectivity and software processing, the demand for semiconductors has only grown.
But as I outlined at the top unfortunately, that leadership position we have had for so long is at stake. So the CHIPS Act, which is built in now--baked into the Endless Frontier Act--directs and empowers key Agencies, like the Department of Commerce, in consultation with others like our intelligence community, to make investments in microelectronics R&D a priority. It emphasizes the need for multilateral efforts with our allies and close trading partners to bring greater transparency and accountability to subsidies. It aligns policies toward non-transparent, non-market competitors like the Chinese, and it makes sure that we have concerted and coordinated action, both domestically and, again, with our allies, on supply chain security and integrity.
It invests billions in basic research related to advanced semiconductors via DOD and a newly created National Semiconductor Technology Center, and it makes an unprecedented investment in trying to build new foundries, fabs, or basic manufacturing facilities, here in the United States so that we have that supply security chain--a secure supply chain for the future.
That $39 billion in that fund I believe will help us build 7 to 10 new fabs right here in the United States. And whether they are in the Presiding Officer's State or Virginia or elsewhere, our States will have to invest as well. Many of these facilities cost anywhere from $12 to $15 billion by the time you build them and keep them operating until they have some level of profitability. So some level of American national investment in each of these is needed to make sure that they--
at least some of these--will be built in the United States. And, again, the $39 billion should generate 7 to 10 new fabs over the next 5 to 7 years.
And whether it is chips for automotive, aerospace, biomedical, or cell phones--you name it--or the billions of ``internet of things'' devices, almost all rely upon semiconductors. Let's make sure those chips are built, designed, and produced here, and that those elsewhere in the world are often done in countries that are allies.
So the Endless Frontier Act, which includes both the investment in 5G and ORAN and, obviously, the semiconductors, serves as a once-in-a-
generation opportunity to solidify U.S. leadership in science and tech innovation. It will strengthen our national security and reinvigorate American ingenuity.
The truth is, colleagues on both sides of the aisle, I know we are supportive of these efforts. I hope next week that we pass this bill with a massive majority, and that then it will be quickly acted upon by the House, because I know our domestic industries are watching us. I know our adversaries are, as well, and it will be wonderful if we can finally move beyond simply talking about the challenges that China presents and actually make the kind of tangible investments that American generations in the past have made.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The PRESIDING OFFICER (Mr. Warnock). The Senator from Nevada.
Ms. CORTEZ MASTO. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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