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The Semiconductor Industry Association (SIA) released the following statement from President and CEO John Neuffer regarding a meeting at the White House between Biden Administration officials and leaders in the semiconductor industry supply chain to discuss the global chip shortage and actions needed to strengthen America’s semiconductor supply chains.
“We welcome today’s meeting and look forward to a productive discussion about the critical role of semiconductors to America’s economy, national security, and global technology leadership, as well as the need to strengthen our country’s chip supply chains. The White House has taken a series of decisive steps aimed at strengthening U.S. chip production and innovation, including initiating a study of America’s chip supply chains, convening a series of dialogues with industry leaders, and – along with leaders in Congress from both parties – strongly advocating for $52 billion in federal investments to boost domestic semiconductor manufacturing, research, and design, as called for by the CHIPS for America Act. We appreciate their ongoing efforts.
“We look forward to working with leaders in Washington to fund the CHIPS Act and enact an investment tax credit encompassing both manufacturing and design to help ensure the long-term resilience of America’s semiconductor supply chains.”
The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today, according to a report by SIA and the Boston Consulting Group (BCG). This decline is largely due to substantial subsidies offered by the governments of our global competitors, placing the U.S. at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities, or “fabs.”
Additionally, federal investment in semiconductor research has been flat as a share of GDP, while other governments have invested substantially in research initiatives to strengthen their own semiconductor capabilities, and existing U.S. tax incentives for R&D lag behind those of other countries. Furthermore, global semiconductor supply chain vulnerabilities have emerged in recent years that must be addressed through government investments in chip manufacturing and research, according to a separate SIA-BCG study.
Recognizing the critical role semiconductors play in America’s future, Congress in January enacted the CHIPS for America Act as part of the FY 2021 National Defense Authorization Act (NDAA). The law authorized incentives for domestic semiconductor manufacturing and investments in chip research, but funding must be provided to make these provisions a reality.
On June 8, in a strong bipartisan vote, the Senate passed legislation called the U.S. Innovation and Competition Act (USICA) that includes $52 billion to fund the CHIPS for America Act. SIA has called on the House to follow suit and send legislation to the President’s desk for signature.
To complement the federal manufacturing grants and research investments authorized by the CHIPS Act, SIA has also called on leaders in Congress to enact an investment tax credit for semiconductor manufacturing and research. A combination of grants, tax credits, and research investments is needed to turbocharge U.S. semiconductor production and innovation.