The Semiconductor Industry Association (SIA) today welcomed the release of a White House report on strengthening the supply chains of critical products, including semiconductors. The Commerce Department report, initiated by President Biden’s Feb. 24 Executive Order on America’s Supply Chains, calls for boosting targeted incentives for domestic semiconductor manufacturing and research to strengthen America’s chip supply chains. The Senate is expected to vote later today on legislation – the United States Innovation and Competition Act (USICA) (S.1260) – that includes $52 billion in federal investments for the domestic semiconductor research, design, and manufacturing provisions in the CHIPS for America Act.
“Semiconductors form the nerve center of America’s economy, national security, and critical infrastructure,” said John Neuffer, SIA president and CEO. “We appreciate the Biden administration’s focus on ensuring the strength and resilience of America’s semiconductor supply chains and applaud the White House report’s call for federal investments in domestic semiconductor production and innovation. We look forward to working with leaders in the Administration and Congress to swiftly enact needed federal investments in chip technology to help ensure more of the chips our country needs are researched, designed, and manufactured on U.S. shores.”
SIA on April 5 submitted comments to the Commerce Department in response to the White House’s supply chain review. The submission highlighted the importance of the global semiconductor supply chain to maintaining a strong semiconductor industry and identifies a range of vulnerabilities in the supply chain. It also urged the Biden administration and Congress to enact federal incentives for domestic chip production and investments in chip research to ensure the long-term strength and resilience of America’s semiconductor supply chain. SIA’s comments echoed the findings of an April 2021 SIA-Boston Consulting Group report on strengthening the global semiconductor supply chain.
The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today, according to a September 2020 report by SIA and BCG. That report also found that with a $50 billion federal investment in domestic semiconductor manufacturing incentives, there would be 19 major semiconductor manufacturing facilities, or fabs, built over the next decade, which is 10 more than would be built without such government investments. Such a federal investment also would create an average of 185,000 temporary American jobs annually and add $24.6 billion annually to the U.S. economy as new semiconductor fabs are constructed from 2021-2026, according to a May 2021 SIA and Oxford Economics study.
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.
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 calls for incentives for domestic semiconductor manufacturing and investments in chip research, but funding must be provided to make these provisions a reality.
