The Semiconductor Industry Association (SIA) sent a letter to members of Congress containing signatures from 123 CEOs and senior executives urging the passage of the CHIPS for America Act.
The letter urges Congress to act quickly to pass a bipartisan compromise version of the bill that will help to increase America’s competitiveness with China as well as boost national security and supply chain resilience. The bill will also supply $52 billion in investments to support future domestic semiconductor research, design and manufacturing.
A version of the CHIPS for America Act was passed by the Senate in June of 2021 and the House of Representatives passed its version of the bill in February. In May, the House and Senate met for the first time to hammer out details on a compromised version of the bill, but it could take several months before a final agreement is reached.
This letter is urging Congress to accelerate negotiations to get the bill passed, and includes signatures from tech vendors Amazon, Broadcom, Cisco Systems, Lockheed Martin, Lyft, HP, GlobalFoundries, Intel, Micron, Microsoft, Nvidia, Qualcomm, Samsung, TSMC, Uber, Texas Instruments and many more.
“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.”
Investment from the government into the semiconductor ecosystem will allow America to lead critical sectors of technology, create thousands of jobs, strengthen the economy and secure the supply chain, Neuffer said.
Additionally, the letter calls for the investment tax credit bill, called the FABS Act, which was introduced by the House earlier this year, to be included in the competitiveness legislation being negotiated.
Why it matters
The share of modern semiconductor manufacturing located in the U.S. has fallen from 37% in 1990 to just 12% today.
The decline is due to foreign companies pushing substantial manufacturing incentives to build fabs. This placed the U.S. at a competitive disadvantage in attracting companies to build fabs compared to other global competitors. As a result, semiconductor manufacturing has aggregated into a select few locations mainly in Taiwan and Korea.
Simultaneously, U.S. federal investment into semiconductor manufacturing and research has been flat as a share of GDP, while other governments have invested substantially in research.
To avoid any further degradation of U.S. competitiveness and to protect against global semiconductor supply chain vulnerabilities that have emerged in recent years — either a pandemic such as COVID-19 or geopolitical problems — government investments in chip manufacturing and research are critical, the SIA said.
CHIPS Act
The provisions in the CHIPS Act are comprehensive, attacking the problem from both design and manufacturing capabilities.
The provisions:
- Call for an income tax credit for new investments in semiconductor capital equipment or manufacturing facilities, available to be claimed through 2026.
- Authorize creation of a Multilateral Semiconductors Security Fund between the U.S. and its international partners for development of “secure semiconductors and secure microelectronic supply chains.”
- Authorize the Department of Commerce through NIST to carry out various activities overseeing allocation of investment funding to support semiconductor R&D activities.
- Authorize the Department of Commerce to study U.S. industrial base capabilities to support national defense, specifically with respect to the manufacture and design of semiconductors.
- Enable the Department of Defense to prioritize use of specified available amounts for programs, projects and activities to support R&D in semiconductors and related technologies.
