S.1600: A Proactive Approach to Supply Chain Security

Tuesday, Jan 28, 2014, 12:00am

by David Isaacs, Vice President, Government Affairs

After the near miss that our industry had with the scheduled shut down of the Federal Helium Reserve, we keep a very close eye on the intricate supply chain for semiconductor manufacturing. For those who regularly follow the SIA blog, you’ll remember that our industry and others that use helium in the manufacturing and operation of critical functions supported a legislative fix that thankfully secured the supply of helium.

That exercise prompted a very important dialogue on the security of the supply of critical elements and minerals, like helium, to industries like ours.  As a key stakeholder industry in this discussion I will offer SIA’s perspective at the Senate Resources Committee hearing on the Critical Minerals Policy Act of 2013 (S. 1600) today.  S. 1600 aims to identify minerals and elements that are critical to U.S. industry and to proactively develop policies that would shield them from supply disruption. What is most important about today’s discussion is that government is taking a proactive approach to a little known issue that has the potential to significantly affect the entire U.S. economy.  We applaud the bipartisan leaders in the Senate that have taken up this important work.  I’ve pulled a short excerpt from the testimony that summarizes our main messages and you can read SIA’s full testimony here.

The process of manufacturing advanced semiconductors relies on a number of critical materials, including minerals, chemicals, and gases.  These and other materials utilized in the semiconductor manufacturing process are selected because they possess unique chemical and physical properties.  In many instances, there are no known alternatives to these materials that satisfy our functional needs. 

Because of our reliance on key materials – and the potential for the supply of these materials to be disrupted – we believe that the Critical Minerals Policy Act is an important bill that warrants prompt consideration.  We support the goal of the bill, which is to identify minerals that are critical to the American economy and may be subject to potential supply disruptions, and to develop a framework for policies to prevent potential disruptions to the supply of these minerals.  Our industry has experienced shortages, price spikes, or other disruptions of key materials in the past, and we believe that it should be a national priority to take reasonable steps to improve the security of supply of critical materials.  The implications of a supply disruption in the semiconductor industry reach far beyond our industry because so many sectors of our economy are dependent on the electronics that are enabled by semiconductors.  Consequently, the ripple effects of a supply disruption can adversely impact major elements of the U.S. and global economy.”