Russia’s invasion of Ukraine underscored the importance of a national industrial policy that President Joe Biden should embrace in his second year. Such a policy should include more rare earth metal production and semiconductor chip manufacturing on these shores. That’s good for national security and for Pennsylvania’s economy in particular.
Now, U.S. manufacturers are almost completely reliant on China and its client states for the rare earth metals that are essential to, among many other things, batteries, electric cars and solar panels. For the past several years, public and private agencies have promised that such elements can be refined from coal mine waste, in which Pennsylvania is uniquely rich. With $140 million in funding from President Joe Biden’s infrastructure bill, it’s time to follow through on those promises.
Pennsylvania is also well-situated to relieve American dependence on foreign-made semiconductor chips, which are the currency of the digital age. Congress should pass the proposed $52 billion in incentives to onshore this essential industry; concerns about government inefficiency and favoritism, such as those raised by Sen. Pat Toomey, fade with a more uncertain and dangerous international scene.
Right now, by far the biggest producer of chips is the Taiwan Semiconductor Manufacturing Company (TSMC), which owns the world’s largest foundry in Hsinchu on the island’s west coast. In the wake of Russia’s aggression, however, reliance on a small country that is eyed greedily by its much larger neighbor — in this case, communist China — feels like a risky bet.
COVID-related semiconductor shortages already roiled the car market last year; a larger disruption, such as loss of access to Taiwan-made TSMC products, would cripple the American economy.
For its part, TSMC is already investing in the United States, including building a $12 billion chip foundry outside Phoenix. And U.S.-based Intel is spending $20 billion on a facility outside Columbus. Compare these numbers to the $6 billion Shell is spending on the massive Beaver County cracker plant to understand just how big, and transformative, these investments can be.
As a growing hub of tech research and business, Pittsburgh’s public and private interests should lobby hard for a big piece of the semiconductor pie.
Russia’s aggression has demonstrated the danger of relying on the goodwill of authoritarian regimes for essential products and raw materials. German officials scoffed when former President Donald Trump warned them about their dependence on Russian natural gas during a United Nations address. Now they look foolish. Meanwhile, nations such as Egypt that relied on Russian and Ukrainian wheat because their climates weren’t suitable for mass production are looking at frightening shortages.
The United States has enough natural, financial and human resources that it should need little, if anything, from other countries. There are benefits to trade, to be sure, but the United States should not depend on its adversaries for any major strategic resource or product.
— Pittsburgh Post-Gazette via AP
