"We are looking at what are those critical capabilities that we should reshore both in the medical resources side of things as well as the industrial base writ large but where defense really has a critical need that then could help industry in general and microelectronics is one of those," Lord said in an on-line interview hosted by the Ronald Reagan Institute. "This is in a way been the silver lining for us."
Lord noted that a recent executive order signed by President Donald Trump allows the Development Finance Corporation - a US agency that loans money to small and midsize firms - to use Defence Production Act funds as collateral for loans to reshore critical capability to the United States.
Lord cited microelectronics, drug components and production of rare-earth minerals as three examples of industries in which the United States needs to regain control of production from China, not only for the Defence Department, but also for the US economy as a whole.
Chinese electronics are particularly vulnerable to implants that send data back to China as in the case of easy-to-fly drones and aerial photography systems, Lord said.
The capability has prompted past US government warnings that the tiny pilotless aircraft send sensitive flight data to rival manufactures and possibly the government in Beijing, she added.