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The Semiconductor Industry Association (SIA) released the following statement from President and CEO John Neuffer in support of a letter sent by a broad coalition of 123 CEOs and senior executives representing major sectors of the American economy and millions of U.S. workers. The letter urges Congress to act urgently to pass a bipartisan, bicameral compromise version of competitiveness legislation, which is critical to America’s economy, national security, and supply chain resilience and will support the future of domestic semiconductor research, design, and manufacturing. Signatories include leaders from the tech, telecom, manufacturing, semiconductor, defense/aerospace, software, and other critical sectors.
“SIA joins U.S. business leaders in calling on Congress to swiftly pass competitiveness legislation that includes critical funding and incentives for domestic semiconductor research, design, and manufacturing,” said John Neuffer, SIA president and CEO. “As demonstrated by the breadth of signatories, America’s economy, workforce, national security, and technological leadership are built on semiconductors. Federal investment in the U.S. semiconductor ecosystem will ensure the U.S. continues to lead in the critical sectors of tomorrow, while also creating hundreds of thousands of high-paying American jobs, strengthening our economy, and securing our supply chains for decades to come.”
On Feb. 4, 2022, the House passed critical CHIPS Act investments totaling $52 billion to strengthen domestic semiconductor manufacturing and research as part of competitiveness legislation, the America COMPETES Act. The Senate passed the same level of funding for the CHIPS Act as part of its version of competitiveness legislation, the United States Competition and Innovation Act (USICA), in June 2021. House and Senate leaders must now work on reconciling differences in the bills and passing bipartisan legislation to be signed by the president.
An investment tax credit for semiconductor manufacturing and design, as called for by the FABS Act introduced in the House, is an important complement to the manufacturing incentives and research investments in USICA and America COMPETES. The House FABS Act should be included in the competitiveness legislation being negotiated.
The share of modern semiconductor manufacturing capacity located in the U.S. has decreased from 37% in 1990 to 12% today. This decline is largely due to substantial manufacturing incentives 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 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 an SIA-BCG study.
A combination of grants, tax credits, and research investments is needed to turbocharge U.S. semiconductor production and innovation. Enacting the House FABS Act and funding the CHIPS Act are essential components of this holistic, complementary approach to strengthening America’s semiconductor capabilities over the long term.
The full letter is available on SIA's website.