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China’s Tentacles Difficult To Untangle from Supply Chain

As government and businesses looked into how disruptions created chaos in the economies during the pandemic, real concerns surfaced around critical goods and services that are a necessity to keep the country functioning.

“We’ve all had a wonderful opportunity during the pandemic to sit at home and watch, all of the things that we’re looking at, from semiconductors to software malware, to meat packing, peanut butter, firmware to formula; all of these particular threats are threatening our supply chains,” said Jeanette McMillian, assistant director for the Supply Chain and Cyber Directorate, National Counterintelligence and Security Center.

Looking into a specific production process of an electronic device that may be a cellphone or a complex component in a weapon system, Lt. Gen. Thomas Horlander, USA (Ret.), strategic business development manager for Defense and National Security, Intel; offered an example: “We design software, we design hardware, that’s the first step; then you go into the manufacturing phase where you’re going to actually take some raw materials, some rare earth elements, and turn those into a microchip,” and went on to explain how different components are added through final assembly and packaging.

“What I just described to you is, it is incredibly complex, and there is not a single actor in that [technology] ecosystem that does it all from cradle to grave, not a single, not a single company, nobody does that from cradle to grave, therein lies an inherent risk in our supply chain because this is a supply chain that is global,” Horlander told the audience at AFCEA’s Intelligence and National Security Summit on Thursday. The panel analyzed the nation’s exposure to China’s interference when acquiring final products and services produced in stages around the world, many going through China.

“The reality is this is really critical right now because our adversaries have stated in their public documents that they’re going to take advantage of their points of leverage [in our supply chains] to impact and inflict pain,” said Halimah Najieb-Locke, deputy assistant secretary of defense, Industrial Base Resilience.

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