Tech

MICROCHIPS Act wants to secure US govt supply chain against Chinese sabotage

New bill would create new government body tasked with reviewing equipment and technologies used by government agencies and US military.

Written by Catalin Cimpanu, Contributor July 31, 2019 at 2:30 p.m. PT

Two US senators have introduced legislation this week to get the US government moving and put in place a national strategy on dealing with supply chain threats that may impact the well-being of the general public, federal agencies, and the US military.

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Named the Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property and Supply (MICROCHIPS) Act (S. 2316), the bill was co-sponsored by Senators Mike Crapo (R-Idaho) and Mark Warner (D-Virginia).

The bill is a reaction to China's ever-increasing influence in the electronics manufacturing industry, and the threat this may pose to the US and its growing reliance on Chinese-made components for crucial systems.

The two senators fear that without action, the Chinese government may abuse its influence over local manufacturers to ship backdoored components to the US.

"An insecure supply chain for products supplied to the United States Government can lead to a degradation of critical infrastructure and technology items that are essential to the defense of the United States," the bill's text reads.

The two senators fear China or other potential adversaries may use a poisoned supply chain approach "to offset the military strength of the United States through asymmetric, nonkinetic actions that compromise and neutralize the decision-making systems, processes, and warfighting capabilities of the United States."

The MICROCHIPS Act would take a stance against such potential threats by establishing a National Supply Chain Security Center within the Office of the Director of National Intelligence.

This new agency will be tasked with collecting information on threats to US government and military supply chains.

This includes the creation of a central clearinghouse structure for assessing technologies and equipment critical to the US government and military, and preventing any compromised materials from entering the US government's supply chain.

Outside of assessing electronics, the bill also covers "emerging technologies," such as 5G, which is becoming a vital part of day-to-day communications, and where China has a leg up on US manufacturers.

"Actions by the People's Republic of China have contributed to an unfair and unsafe advantage in its technological race against the United States," said Senator Crapo.

"Through government investments and subsidies, as well as intellectual property theft of companies like Idaho's Micron, China aims to dominate a $1.5 trillion electronics industry, which creates serious, far-reaching threats to the supply chains that support the U.S. government and military," Senator Crapo added.

"While there is a broad recognition of the threats to our supply chain posed by China, we still lack a coordinated, whole-of-government strategy to defend ourselves," said Senator Warner.

"As a result, U.S. companies lose billions of dollars to intellectual property theft every year, and counterfeit and compromised electronics in U.S. military, government and critical civilian platforms give China potential backdoors to compromise these systems," Senator Warner added.

Besides China, the bill's text also mentions Russia as another threat that may engage in supply-chain attacks.