Democrats' woke politics, corporations threaten US industrial revival

Success of the CHIPS Act is also endangered by unpatriotic corporations

As often happens in Congress, a bipartisan and targeted effort to address a genuine issue is being threatened by partisan politics and Wall Street

Republicans introduced the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, which became law 15 months ago, to revitalize America’s lagging semiconductor industry and protect against supply chain disruptions. It was exactly the type of pro-America industrial policy I called for in December 2019 at the National Defense University. 

Due to COVID-19 and the war in Ukraine, supply-chain disruptions are no longer hypothetical – they are hurting Americans every day. And that is to say nothing of the threat posed by our reliance on Communist China for everything from rare-earth minerals to pharmaceutical ingredients. 

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Despite the dangers we face, however, the CHIPS Act has yet to be funded. Instead, it has become a political football, with Democrats using the funding process to advance their woke priorities. These games threaten to dilute the program’s impact. 

Funding for the CHIPS Act is part of a larger bill that is supposed to help America compete with Communist China. As part of their effort to pass that bill last year, Senate Democrats inserted requirements that semiconductor producers receiving CHIPS funding "provide … data on the racial diversity of their workforce" and that the government prioritize companies that make "efforts to hire individuals from disadvantaged populations" when allocating funding. 

House Democrats went a step further, requiring the creation of an "Office of Opportunity and Inclusion" at the U.S. Department of Commerce, much like the "Diversity, Equity, and Inclusion" regimes that companies and institutions have established to curry favor with social justice activists. If Democrats get their way, CHIPS investment decisions will be guided by the woke agenda, not common sense. 

For the past 20 years, the lure of Chinese markets has turned American businesses into assets of the Chinese Communist Party (CCP). 

There is no doubt that American deindustrialization harmed minority communities. But that is an argument in favor of a broad-based industrial policy, not letting misguided equity officers dictate the terms of domestic semiconductor production. 

Woke nonsense isn’t all we have to worry about, though. The success of the CHIPS Act is also endangered by unpatriotic corporations. 

For the past 20 years, the lure of Chinese markets has turned American businesses into assets of the Chinese Communist Party (CCP). Pro-America industrial policy will help reverse the trend – but only if necessary safeguards are in place. Otherwise, programs designed to give the U.S. a competitive advantage could end up benefiting the CCP. 

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Just look at Intel, which is America’s largest semiconductor producer. Last December, the company scrubbed a reference to the CCP’s ongoing genocide in Xinjiang to keep the Chinese happy. And that is to say nothing of the company’s long history of sending production abroad, including to China, even as its leaders have issued dire warnings about the dangers of offshoring.  

"Plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs," then-CEO of Intel Andy Grove warned in 2010. The same principle holds for mature companies carrying water for the CCP. Supporting domestic manufacturers only helps the U.S. when those manufacturers side with America over its adversaries. 

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Semiconductors are an essential technology that powers everything from iPhones to advanced weapons. And yet, we are almost completely dependent on East Asian imports for our supply. The CHIPS Act was carefully crafted to eliminate this dangerous liability. A year after its enactment, however, the misplaced priorities of activists and corporations threaten to reduce its effectiveness. 

Policymakers must return to the vision that originally animated the CHIPS Act: one of the government working alongside private entities to revitalize a critical industry, create American jobs, and advance the national interest. The more we deviate from this vision, the more ground we lose to the CCP – and we are already too far behind. 

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