The share global semiconductor manufacturing capacity in the U.S. has eroded from 37% in 1990 to 12% today, mostly because other countries’ governments have invested ambitiously in chip manufacturing incentives and the U.S. government has not. Meanwhile, federal investments in chip research have held flat as a share of GDP, while other countries have significantly ramped up research investments.
By enacting the CHIPS for America Act in the FY 2021 National Defense Authorization Act (NDAA), Congress recognized the critical role the U.S. semiconductor industry plays in America’s future. Now, the administration and Congress must fully fund the semiconductor manufacturing and research provisions authorized by the CHIPS Act — and enact an investment tax credit — to strengthen America’s global leadership in chip technology for years to come.
The U.S. Senate on June 8, 2021 took a significant step toward this goal by passing the U.S. Innovation and Competition Act (USICA) (S.1260), which includes $52 billion in federal investments for the domestic semiconductor research, design, and manufacturing provisions in the CHIPS Act. The House of Representatives should swiftly follow suit and send legislation to the President’s desk to be signed into law.
Congress is also considering legislation called the FABS Act that would establish a semiconductor investment tax credit. The FABS Act should be expanded to include expenditures for both manufacturing and design to help strengthen the entire semiconductor ecosystem.
By funding the CHIPS Act and expanding and enacting the FABS Act, leaders in Washington can usher in a historic resurgence of chip manufacturing in America, strengthen our country’s most critical industries, boost domestic chip research and design, and help ensure the U.S. leads in the crucial, chip-enabled technologies that will define America’s strength for decades to come.
“Senate passage of USICA is a pivotal step toward strengthening U.S. semiconductor production and innovation and an indication of the strong, bipartisan support in Washington for ensuring sustained American leadership in science and technology,” said John Neuffer, SIA president and CEO. “We applaud Sens. Schumer, Cornyn, Warner, Young, Kelly, Cotton, and others for their leadership in promoting federal investments in U.S. semiconductor manufacturing, research, and design and commend today’s Senate approval of these provisions in USICA. We call on the House to swiftly pass needed federal investments in domestic chip technology and send legislation to the President’s desk to be signed into law. Enactment of these investments would help strengthen America’s economy, national security, technology leadership, and global competitiveness for years to come.”
We welcome the release of a White House report on strengthening the supply chains of critical products, including semiconductors. The Commerce Department report calls for boosting targeted incentives for domestic semiconductor manufacturing and research to strengthen America’s chip supply chains.
The semiconductor industry directly employs nearly 250,000 people in America and supports more than one million additional jobs throughout the U.S. economy. With bold greater federal investment in domestic chip manufacturing and research, our economic impact would be even greater.