TIPP Insights: Americans view semiconductor manufacturing as critical to National Security

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By tippinsights Editorial Board, TIPP Insights

Despite polarization on many issues, Americans speak with one voice on national security. 71% think that a robust semiconductor manufacturing base is critical to national security.

In a TIPP Poll of 1,318 adults conducted in early March 2022, we asked Americans the following question:  Generally speaking, thinking about the following industries, how important is a strong manufacturing base to the United States’ national security? Semiconductor chips.

We had asked the same question in July 2021. Here’s the tally of results:

  • 48% Very important in March 2022 (up from 45% in July 2021)
  • 23% Somewhat important (up from 21%)
  • 7% Not very important (same as 7%)
  • 3% Not at all important (down from 4%)
  • 19% Not sure (down from 23%)

As our data shows, the importance has increased by five points between the two waves of research. Geopolitical uncertainty and pandemic-related supply chain difficulties explain the rise in importance.

Importance of a strong semiconductor manufacturing base to national security - March 2022 vs. July 2021

Across the board, among all party affiliations and ideologies, Americans share the sentiment:

  • 74% of Democrats
  • 73% of Republicans
  • 70% of Independents
  • 79% of Conservatives
  • 70% of Moderates
  • 71% of Liberals
Importance of a strong semiconductor manufacturing base to national security - by party and ideology

The Awakening

Electronic products, from cellphones to medical devices to automobiles, use semiconductors. Over the past 30 years, the U.S. has gone from producing about 40% of the world’s semiconductors to making only 12%. The pandemic was a wake-up call, highlighting the fragility of global supply chains.

The median inventory for the most difficult-to-obtain semiconductor products fell from 40 days in 2019 to less than five days in 2021. An overseas disruption that causes a semiconductor plant to close for 2-3 weeks can disable a U.S. facility with only 3 to 5 days of inventory. Due to a shortage of semiconductor chips, automobile companies had to halt production. This resulted in skyrocketing used car prices driving high inflation.

The U.S. relies on Taiwan for semiconductors. Taiwan has one of the world’s largest semiconductor manufacturers, Taiwan Semiconductor Manufacturing Company.

China has been rattling the sabers in the South China Sea, claiming that Taiwan belongs to China. President Xi Jinping is waiting for the right moment to make his move to integrate Taiwan. Any conflict in the region will have an impact on the supply chain. Furthermore, the U.S. does not want to rely on Chinese manufacturers such as Huawei for chips due to security issues. Lithuania recently banned Huawei for security reasons.

Boosting Investments

To achieve self-sufficiency, the United States must invest in semiconductor manufacturing. In 2021, the Semiconductor Industry Association forecasted the industry’s capital expenditures. It estimated about $150 billion for 2021 and over $150 billion for 2022. The forecasts consider announcements by Intel to build a facility in Ohio and Global Foundries to create a new fab in New York. Before 2021, the industry spent under $115 billion on annual capital expenditures.

Last month, Commerce Secretary Gina Raimondo cautioned the country is staring down a “national emergency” if it doesn’t get funding approved to ramp up domestic manufacturing of semiconductors. “We are in a dangerous situation, and there is one solution: make chips in America, and it’s not going to happen until the CHIPS Act gets passed,” Raimondo said.

Americans concur with her. Investments to strengthen the semiconductor industry will strengthen U.S. technological leadership. It is also critical to our national security in light of increased global threats from China and Russia.

READ MORE FROM TIPP INSIGHTS

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