GAO Offers Options for Improving U.S. Semiconductor Supply

In response to the ongoing global semiconductor supply shortage that began in 2020, the U.S. Government Accountability Office issued a report on Tuesday on policy options and considerations to decrease semiconductor supply chain risks and lessen future shortages.

GAO conducted a study and interviewed 17 experts—who include industry executives, government officials, academics and representatives from non-profits—about this issue. The experts unanimously agreed on the need for workforce development, such as training programs and immigration reform to prepare for future needs. 

The experts highlighted four additional areas for the government to reduce semiconductor supply chain risks, including: manufacturing capacity, research and development, supply chain strengthening and international coordination.

Specifically, options include policy that provides financial incentives and streamlines the permit process in order to increase U.S. production; strengthen domestic research and development; enhance security and perform more robust monitoring to strengthen the supply chain; and work with international partners to improve the global supply chain.

The experts also noted the importance of federal government goal prioritization and cross-agency collaboration. These semiconductor supply chain risk policy priorities could include national security, economic competition and increased resilience. According to the experts, an appropriate policy would depend on the federal priority. 

For instance, if national security is a priority, an appropriate policy would be to increase the production of semiconductors in the U.S. However, if economic competitiveness or supply chain resilience are priorities, then a policy option would include semiconductor production outside of the U.S. It is also important for federal agencies working on issues with semiconductors to coordinate and identify current activities and the need for more action. 

According to the experts, the use of multiple methods is key, because one action was deemed not enough to rectify this issue. However, some experts also stressed the importance of the private sector’s role to help address supply chain risks.  

“Today’s report confirms what we already know,” Sen. Raphael Warnock, D-Ga., said in a press release. “Semiconductor shortages are hurting our economy, raising costs and weakening our national security.”

Congress is also taking steps to address this issue. On Tuesday, the Senate approved a vehicle to pass the Creating Helpful Incentives to Produce Semiconductors for America Act, also known as the CHIPS Act, which would appropriate $52 billion to improve production. 

Previously, the Senate passed the United States Innovation and Competition Act of 2021 and the House of Representatives passed the America COMPETES Act of 2022 to address concerns about the U.S.’s decreasing share of global semiconductor production and appropriate funding for the CHIPS Act.