Broad Coalition of Business and Labor Groups Urges Congress to Fund CHIPS Act, Enact Strengthened FABS Act to Boost Domestic Semiconductor Research, Design, Manufacturing

by Semiconductor Industry Association

WASHINGTON—Feb. 16, 2022—The Semiconductor Industry Association (SIA) — along with a broad coalition of 20 other tech, auto, medical, defense, and other business and labor groups — today in a letter urged Congress to immediately enact $52 billion to fund the CHIPS Act and to enact a strengthened FABS Act to bolster domestic semiconductor research, design, and manufacturing. The letter’s signatories represent major sectors of the American economy and millions of U.S. workers.

The House of Representatives on Feb. 4 passed CHIPS Act investments totaling $52 billion as part of 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. The House and Senate must now reach agreement on joint competitiveness legislation containing CHIPS Act investments that can be passed by both chambers and signed into law by President Biden. Congress is also considering separate legislation containing a modified version of the FABS Act to provide an investment tax credit to incentivize semiconductor manufacturing in the United States. SIA has called for enacting this legislation and expanding it to cover both semiconductor manufacturing and design.

“Semiconductors are at the heart of America’s economic growth, technology leadership, and national security, so investing in the future of domestic chip production and innovation is a national priority,” said John Neuffer, SIA president and CEO. “Today’s letter demonstrates the breadth of support – throughout a range of sectors of our economy – for enactment of bipartisan, bicameral competitiveness legislation that includes $52 billion to fund the CHIPS Act, as well as enactment of a strengthened FABS Act. Federal investments in the U.S. semiconductor ecosystem will spur hundreds of billions of dollars in private investments, create hundreds of thousands of American jobs, and strengthen our economy and supply chains for the long term. It’s time to get these initiatives across the finish line.”

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 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 an SIA-BCG study.

The following groups, representing major sectors of the American economy and millions of U.S. workers, signed today’s letter: AdvaMed, Alliance for Automotive Innovation, American Automotive Policy Council (AAPC), Autos Drive America, Business Roundtable (BRT), CTIA, Information Technology Industry Council (ITI), IPC – Build Electronics Better, Motor & Equipment Manufacturers Association (MEMA), National Defense Industrial Association (NDIA), National Electrical Manufacturers Association, North America’s Building Trades Unions (NABTU), SEMI, Semiconductor Industry Association (SIA), Software & Information Industry Association (SIIA), Tech CEO Council, TechNet, Telecommunications Industry Association (TIA), Truck and Engine Manufacturers Association (EMA), U.S. Chamber of Commerce, and USTelecom – The Broadband Association.

The full letter is available here and below.

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February 16, 2022

The Honorable Nancy Pelosi
U.S. House of Representatives
Washington, DC 20515

The Honorable Kevin McCarthy
U.S. House of Representatives
Washington, DC 20515

The Honorable Chuck Schumer
U.S. Senate
Washington, DC 20510

The Honorable Mitch McConnell
U.S. Senate
Washington, DC 20510

Dear Speaker Pelosi, Leader Schumer, Leader McCarthy, and Leader McConnell:

With both the House and Senate having passed legislation to provide for funding of the CHIPS for America Act, the undersigned associations and labor organizations – representing major sectors of the American economy and millions of workers – urge you to take immediate action to reconcile the two bills and reach a bipartisan compromise on competitiveness legislation for signature by the president. In addition to critical funding for the CHIPS Act, we call on Congress to adopt a strengthened version of the investment tax credit set forth in the FABS Act for both semiconductor manufacturing and design.

It has been over a year since Congress authorized the CHIPS Act in the FY2021 National Defense Authorization Act, and it is essential Congress act swiftly to provide funding to make this law a reality. Our global competitors are investing heavily in semiconductor manufacturing and research, and continued inaction by the U.S. risks placing our country further behind in the competition for economic growth, supply chain resilience, technology leadership, and strengthened national security. The current chip shortage continues, highlighting the critical role of semiconductors throughout the economy and the need to better position the U.S. to weather future supply chain disruptions.

Now is the time to act on this important national priority. Funding for the CHIPS Act as part of a broader competitiveness package will help reinvigorate domestic semiconductor manufacturing and technology development needed to grow our economy and enhance our national security. Additionally, adoption of a strengthened FABS Act will ensure long term success in semiconductor manufacturing and design in the U.S. by incentivizing investment in new, expanded, and upgraded fabs, equipment production facilities, and chip design. We urge immediate action to commence negotiations and work towards a final compromise bill that can swiftly pass both chambers and send this vital legislation to the president’s desk.

Sincerely,

AdvaMed
Alliance for Automotive Innovation
American Automotive Policy Council (AAPC)
Autos Drive America
Business Roundtable (BRT)
CTIA
Information Technology Industry Council (ITI)
IPC – Build Electronics Better
Motor & Equipment Manufacturers Association (MEMA)
National Defense Industrial Association (NDIA)
National Electrical Manufacturers Association
North America’s Building Trades Unions (NABTU)
SEMI
Semiconductor Industry Association (SIA)
Software & Information Industry Association (SIIA)
Tech CEO Council
TechNet
Telecommunications Industry Association (TIA)
Truck and Engine Manufacturers Association (EMA)
US Chamber of Commerce
USTelecom – The Broadband Association

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About SIA
The Semiconductor Industry Association (SIA) is the voice of the semiconductor industry, one of America’s top export industries and a key driver of America’s economic strength, national security, and global competitiveness. Semiconductors – the tiny chips that enable modern technologies – power incredible products and services that have transformed our lives and our economy. The semiconductor industry directly employs over a quarter of a million workers in the United States, and U.S. semiconductor company sales totaled $258 billion in 2021. SIA represents 99% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms. Through this coalition, SIA seeks to strengthen leadership of semiconductor manufacturing, design, and research by working with Congress, the Administration, and key industry stakeholders around the world to encourage policies that fuel innovation, propel business, and drive international competition. Learn more at www.semiconductors.org.