SAN FRANCISCO—The White House on Friday (Jan. 6) made public a strongly worded report on the U.S. semiconductor industry and the threat posed to it by China’s aggressive ambition to become a global player in the chip space.
The report, made to U.S. President Barack Obama by the President’s Council of Advisors on Science & Technology (PCAST), argues that the U.S. semiconductor industry needs to innovate and “run faster” in order to counter the threat posed by Chinese policies that distort the market in its favor.
"The core finding of the report is this: only by continuing to innovate at the cutting edge with the United States be able to mitigate the threat posed by Chinese industrial policy and strengthen the U.S. economy," wrote John Holdren and Eric Lander, PCAST co-chairs, in a letter to Obama that accompanies the report.
The report broadly recommends a strategy built on three pillars: push back against "innovation-inhibiting" Chinese industrial policy, improve the business environment for U.S. chip companies and "help catalyze transformative semiconductor innovation over the next decade." This final pillar entails the funding of "moonshots" such as the development of new bio-defense systems and medical technologies that would have their own merit but would also result in advancements in semiconductor technology that would have broader applicability.
The report was widely expected after Obama in October convened a group of semiconductor veterans to study the top issues affecting the chip industry in the U.S. Earlier this week, the Wall Street Journal reported that the report could recommend strategies that curb Chinese investment in U.S. semiconductor and related companies.
The report does not contain specific recommendations for limiting Chinese investment in the U.S. chip industry. However, it does recommend using the tools of national security such as the Committee on Foreign Investment in the U.S. (CIFUS) and working with allies to deny China access to the capabilities required to undermine cutting-edge and defense critical U.S.-based companies through policies deemed anti-competitive.
"We found that Chinese policies are distorting markets in ways that undermine innovation, subtract from U.S. market share and put U.S. national security at risk," the report reads.