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Gov. Greg Abbott (R-TX) wants the Lone Star State to become a hub for semiconductor manufacturing as critical industries are impacted by the global supply chain crisis.
During an interview with Fox Business on Sunday, Abbott argued that the United States miscalculated when it outsourced the manufacturing of certain key materials.
“The country made a mistake over the past one or two decades to farm out manufacturing of all these essential supplies,” said Abbott, “whether it be now semiconductors or could be health care supplies that we needed during the time of COVID, whatever the case may be, we need to not depend upon China or other countries for our essential needs, for things like semiconductors.”
“That is exactly why Texas actually is leading the way, becoming the home for semiconductors that go into everything that people use,” he continued. “It’s not just your iPhone or your laptop or whatever the case may be. It’s also in all of these vehicles where you have manufacturing going on.”
Indeed, supply chain bottlenecks are causing a global semiconductor shortage — resulting in headaches among automotive executives. Last month, Ford struck a strategic agreement with GlobalFoundries to develop computer chips, while General Motors is likewise pursuing stronger relationships with manufacturers.
Meanwhile, Samsung announced that it would build a $17 billion semiconductor factory in Taylor, Texas — marking the largest foreign direct investment in the state’s history.
“Companies like Samsung continue to invest in Texas because of our world-class business climate and exceptional workforce,” said Abbott in a statement. “Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry.”
“As one of the largest foreign investment economic development projects in United States history, to say Samsung’s commitment to this project is monumental would be a huge understatement,” added Taylor Economic Development Corporation President and CEO Mark Thomas.
As Abbott mentioned, supply chain backlogs are threatening the supply of several dozen pharmaceutical products — including heart medications, antibiotics, and cancer drugs. The United States Food and Drug Administration has “asked manufacturers to evaluate their entire supply chain, including active pharmaceutical ingredients, finished dose forms, and any components that may be impacted in any area of the supply chain due to the COVID-19 outbreak.”
According to the Council on Foreign Relations, American companies have grown increasingly reliant upon pharmaceutical imports from China and India. As of March 2020, 80% of active pharmaceutical ingredients and 90% of generic medicines come from the two nations.
The supply chain and labor shortage crises are also affecting the defense industry.
“When I think about the challenges that we all might face going into next year, the labor shortages that we’re seeing are suddenly one that’s top of mind,” said Northrop Grumman CEO Kathy Warden during a CNBC interview. “We have seen an increase in demand for the kinds of skills that we need to support our work at the same time that we’ve seen labor participation rates go down.”