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With Upstate New York Growing As a Global Hub For The Microchip Industry, Schumer Launches All Out Effort To Strengthen National Security, Boost US Chip Industry, And Create Upstate NY Jobs By Ensuring Semiconductor Products Used By The Feds Are Made In The U.S.

Schumer—Author Of The Historic CHIPS & Science Bill That Is Bringing Semiconductor Manufacturing Jobs Back From Overseas—Now Wants To Cut Off Fed Use Of Chips From Companies With Known Links To The Chinese Communist Party That Threaten National Security 

Schumer: Our Semiconductor Supply Chains Should Be Stamped Made In NY! 

On the heels of his historic CHIPS and Science Bill becoming law, which is already drawing major semiconductor investment to Central New York, U.S. Senate Majority Leader Charles E. Schumer today is launching a new push to limit the use of semiconductor chips made in China, including in supply chains for the Defense Department, in order to strengthen national security, bring critical semiconductor manufacturing back from overseas, and limit foreign dominance of the global microchip market.

Schumer revealed that major Chinese companies, with known links to the Chinese Communist Party (CCP), are actively selling microchips to companies that do business with the federal government, and suppliers to those businesses, which makes the U.S. government more vulnerable to cyberattacks and the exfiltration of information by foreign competitors, and potentially puts New Yorkers’ data at risk. 

To combat this, Schumer said he is working to add a bipartisan provision to this year’s National Defense Authorization Act (NDAA) to limit the use of products or services procured by the federal government if those products or services use chips from known companies that pose a national security risk, which will not only protect the security of U.S. supply chains, but help boost demand for more domestically made microchips, including from places like Upstate New York.

“Because of my CHIPS and Science bill, Upstate New York is seeing unprecedented investment and thousands of new jobs rebuilding American microchip manufacturing. Now that these investments are happening, we need to address another significant threat to our economic vitality and national security: microchips supplied by companies backed by the Chinese Community Party, which could undermine U.S. supply chains and potentially put New Yorkers’ data at risk,” said Senator Schumer. “That is why I am launching a new push to crack down on the use of certain Chinese-made chips in the supply chain from companies backed by the Chinese regime. It’s simple: if you want the federal government to buy your products or services, you can’t be using the kind of Chinese-made chips that put our national security at risk. To win the 21st century we need to secure our supply chains, and make sure the chips that our government and economy rely on are built in places like Syracuse and not by companies backed by adversaries like the Chinese Communist Party.”

Schumer explained that semiconductor technology is a critical part of not only our daily lives with microchips being used in everything from smartphones and household appliances to cars, but also are critical to our national security with our military technology and critical infrastructure fully reliant on these chips. Currently, however, semiconductor technology and services are absent from many restrictions in federal procurement creating a potential major point of vulnerability for cyber-attacks and data privacy.  The Chinese Communist Party has made it a priority to invest in expanding their homegrown microchip industry to dominate more of the global market of this critical technology, efforts that have grown the industry significantly in recent years. In 2011, China had just under 1,300 chip companies, but by 2020, this number grew to 22,800.  Earlier this year, the CCP-backed chip company, Semiconductor Manufacturing International Corporation (SMIC) reportedly produced an advanced 7nm chip using some of the most advanced chip manufacturing capabilities, sending a warning sign that the Chinese Communist Party is making concerning strides forward in leading in this critical technology.

Specifically, Schumer’s NDAA provision adds three Chinese companies, including SMIC, as well as ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC), all with known links to Chinese state security and intelligence apparatuses, as newly covered entities to limit federal procurement of products or services that uses microchips produced by these Chinese companies. Schumer said this addition will help protect safe and trusted suppliers of semiconductor technology by limiting the proliferation of nefarious semiconductor products, helping build more secure and resilient domestic supply chains of chips made in places like Upstate New York. 

These policies and regulations are proven to work in getting companies to divert investment from suppliers that could risk national security. Following pressure from Schumer and other national security leaders, Apple this week is reportedly freezing its plans to use memory chips from China's YMTC in its products given that the Biden Administration recently added YMTC to an export control list, an action that Schumer has been actively pushing for given the national security concerns posed by the use of YMTC and other Chinese-made chips. This work builds on Schumer’s long-time efforts of shedding light on Chinese companies linked to the CCP operating in the United States. In 2019, Schumer led a bipartisan letter requesting the Department of Defense to publish a list of companies operating in the United States that are owned or controlled by the Chinese military. Schumer’s efforts directly led to DoD making public for the first time a list of Chinese companies that are operating in the U.S in June 2020. The Biden Administration has added further companies to this DOD list, including SMIC. 

Schumer has been the leading champion of bringing semiconductor manufacturing back to America and has a long history of fighting to secure this investment for Upstate New York. Going back to 2019, Schumer proposed a major tech investment “moon shot” in cutting-edge technologies like semiconductors to out-compete China. Schumer then spent the next three years working to pass into law this vision – ultimately manifesting itself into the CHIPS and Science Act, which makes a generational investment in innovation and manufacturing, including providing over $52 billion in new federal incentives for microchip manufacturing and research and development in the U.S., along with the creation of a new federal investment tax credit to support the expansion of domestic microchip production.