Commerce secretary warns Texas faces 'disproportionate' risk as computer chip supplies slow

Texas and its large technology and defense sectors face particular risk as global supplies for computer chips become increasingly tight, Commerce Secretary Gina Raimondo said Monday. The Biden administration is making a public push for Republicans and Democrats in Congress to come together on legislation that would pump more than $50 billion into expanding U.S. manufacturing of computer chips, also known as semiconductors, as global demand rises and manufacturers struggle to lock down supplies. "All states would be impacted but Texas would be disproportionately effected (if the legislation doesn't pass)," Raimondo said. "You have a number of defense contractors in Texas that are utterly dependent on chips... You have the tech industry around Austin, Houston and Dallas. And you have a number of companies in the chip industry."

On Friday, Republicans and Democrats announced they had agreed to set up a conference committee to work out the differences between the House and Senate versions of the United States Innovation and Competition Act, in which Sen. John Cornyn, R-Texas, and Rep. Eddie Bernice Johnson, D-Dallas, have emerged as leaders. A sprawling piece of legislation designed to spur innovation across the U.S.economy, the bill would give the Commerce Department $52 billion to expand domestic chip manufacturing. A recent survey by the Commerce Department found that U.S. chip inventories had fallen almost 90 percent over the past two years, as demand rises globally. "Chip companies are going to have to expand. The question is do they do it in the U.S. or in Europe or Asia," Raimondo said. "If congress doesn't move now, were going to lose out forever." Democrats and Republicans have largely come to agreement on the funding for chip manufacturing. But other components of the legislation are driving discord.