Former National Security Advisor Warns of American Semiconductor Weakness Against China

WASHINGTON, August 2, 2023 – The United States needs to collaborate with its allies to ensure semiconductor supply chain resilience, said a former National Security Advisor.

Robert O’Brien, chairman of strategic advisory firm American Global Strategies, said at a Hudson Institute event Tuesday that the semiconductor industry — the chips that run all electronic devices — is a primary industry of concern for competition with China.

O’Brien urged the government to cooperate with allies to onshore, moving plants onto domestic land, and “friend-shore,” moving plants into allying countries, manufacturing plants. Failing to do so will subject the U.S. and its allies to additional risks in the future, he said.

The United States’ advantage is that it has “real allies” that share its beliefs and values, particularly for liberty and a free market, said O’Brien. In contrast, China has very few allies that share its values and are not paid for their loyalty, he said. He urged the U.S. to capitalize on its strengths.

There are many countries, including Philippines, Thailand, India, and Mexico that have manufacturing capability that can support American demand in place of China, he said.

Beijing is not interested in being an economic partner, O’Brien warned. In 2020, the country had over 22,000 companies in the semiconductor industry. The sector only continues to grow as China’s policies provide incentives for companies to produce at scale.

Appeasement and negotiation are not options when dealing with China, said O’Brien. China does not play by the same rules as western states, it generates wealth by stealing the intellectual property of American companies. There is no way to compete with China if we continue to allow theft to happen, he said.

Ultimately, the competition between the countries is not a squabble over ideals, but instead a fight between liberty and the “worst form” of totalitarianism, claimed O’Brien. For this reason, he suggested that the Biden Administration take measures to limit American private investment in the Chinese government.

President Joe Biden’s Investing in America initiative is investing billions of dollars into the United States’ domestic manufacturing. Congress passed the Inflation Reduction Act and CHIPS and Science Act in 2021 which invest in America’s electric vehicle and green energy plans and semiconductor manufacturing.

Biden ran his presidential election campaign on his initiative to move companies onshore, defend American supply chains, and create more jobs. According to the White House, the agenda has “already attracted hundreds of billions of dollars in private investment and created nearly 800,000 new manufacturing jobs in everything from semiconductors and electric car batteries to clean energy technology and more.”