Mellman: The issue that US policymakers must focus on — right now

When human beings first built cities in dry climates, then walled them in to protect against enemies, they tried to ensure their water sources were inside the walls.  

Leaving the water outside the protected zone would’ve made it easy for adversaries to quickly bring the inhabitants to their knees.  

As the mayor of Dirt put it in the animated film “Rango,” about a chameleon in the American southwest, “If you control water, you control everything!” 

Keep that idea in mind. 

Last week, Ford reduced or halted manufacturing at eight plants due to a shortage of computer chips.  

Last year, the auto industry globally lost $210 billion in revenue and production of 7.7 million vehicles due to chip shortages.  

And that’s just the tip of one iceberg. It’s estimated that 169 different industries depend on chips — from cars to computers to kitchen appliances to medical devices to water treatment plants to defense systems, the list goes on, endlessly. 

We count on ubiquitous microchips to function; chips are the water of the digital age. Without them we’re lost. 

Nevertheless, by allowing the distribution of world chip manufacturing to be dictated by the vagaries of the world economy, instead of by our national interest, we’ve created a massive strategic vulnerability for the United States. 

Some 60 percent of the world’s chip production occurs in Taiwan and China. Taiwan is the source of 92 percent of the world’s most advanced chips. The U.S. makes just 12 percent of the world’s chips and none of the most advanced. 

“Water” — in the form of chips — is not just outside America’s walls; in Taiwan it is separated from archrival China by a mere 100 miles. China, of course, has never renounced its desire to take Taiwan, by force if necessary. 

Paradoxically, Taiwan’s chips may afford some protection from China’s designs. China too depends on Taiwanese chips and if it were to attack the island, there’s no guarantee the plants would continue production.  

But the simple reality is that whatever the effect on China, a shutdown — even a slowdown — of Taiwanese chip production would have an instantaneous and devastating effect on the U.S. and world economies, as well as on our ability to defend ourselves.  

Whether it’s interrupted by invasion, cyberattack or natural disaster, the huge concentration of chip manufacturing outside the United States constitutes a vast and unnecessary threat to the U.S. 

The pandemic has taken an additional toll, reducing chip inventories from 40 days to fewer than five days, according to a Department of Commerce report. And the shortage is fueling the inflation with which we’re now grappling.  

That’s just one reason the America COMPETES Act, passed by the House last week, is so vital. 

Chip plants are incredibly expensive, so Taiwan and China offer manufacturers huge subsidies. 

I’m enormously proud that my hometown, Columbus, Ohio, was selected as the site of Intel’s first chip plant in 40 years. The company plans to build at least two on the site, at a staggering cost of $20 billion.  

Federal help in the COMPETES Act could leverage the investment to $100 billion, and vastly increase production.  

I wouldn’t begin to suggest that average Americans are cognizant of the threat — they aren’t. But, in their wisdom, the public is certain it’s time to act. 

A Data for Progress poll asked voters their view on a bill backed by President Biden which “includes $52 billion dollars to boost domestic manufacturing of semiconductors (computer chips).” Seventy-three percent of respondents supported the bill, including 63 percent of Republicans who favored the legislation, despite its identification with a Democratic president.  

Given the stakes, and the public support, the fact that just one single Republican member of Congress voted for the House bill is shocking evidence of the way polarization in Washington degrades our national security.  

For our nation’s security and well-being, America needs a secure supply of chips, in our heartland. 

Mellman is president of The Mellman Group and has helped elect 30 U.S. senators, 12 governors and dozens of House members. Mellman served as pollster to Senate Democratic leaders for over 20 years and is president of Democratic Majority for Israel.   

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