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New Bill Aims to Prevent Exploitation of  theTechnology Supply Chain

New Bill Aims to Prevent Exploitation of the Technology Supply Chain

“While there is 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.

On July 30 Senators. Mike Crapo (R-Idaho) and Mark Warner (D-Va.) introduced legislation intended to secure the U.S. technological supply chains from exploitation from countries such as China. 

>The Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property and Supply (Microchips) Act would establish a National Supply Chain Security Center within the Office of the Director of National Intelligence.

“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.  The MICROCHIPS Act would create a coordinated whole-of-government approach to identify and prevent these efforts and others aimed at undermining or interrupting the timely and secure provision of dual-use technologies vital to our national security.”

A statement by the Senator said that Chinese companies, which export telecommunication technology equipment into software, hardware, and services used in the United States, hope to export fifth-generation technology (5G) to the U.S. that could potentially harm and expose both consumer and U.S. military information. 

Sen. Warner pointed out that malicious chips or counterfeit parts could create backdoors enabling the monitoring or stealing of consumer data or cause broader system malfunctions. 

“While there is 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. We need a national strategy to unify efforts across the government to protect our supply chain and our national security.”

The MICROCHIPS Act would address China’s practice of four major non-kinetic areas of warfare, including supply chain exploitation through supplying faulty software hardware and components; cyber-physical attacks on U.S. systems with real-time operating deadlines, such as missiles, aircraft and electrical grids; cyber-attacks on computer systems; and bad actors gaining sensitive information.  S. 2316 contains four sections with the following main components:

  • Summarizes key findings of Congress regarding supply chain security;
  • Directs the Director of National Intelligence, DOD and other relevant agencies to develop a plan to increase supply chain intelligence within 180 days;
  • Establishes a National Supply Chain Security Center within the Office of the Director of National Intelligence to collect supply chain threat information and disseminate it to agencies with the authority to intervene; and
  • Makes funds available under the Defense Production Act for federal supply chain security enhancements.
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