Coalition of Tech, Auto, Medical, Defense, Other Business and Labor Groups Calls on Congress to Invest in Domestic Semiconductor Manufacturing, Research, Design

by Semiconductor Industry Association

WASHINGTON—July 22, 2021—The Semiconductor Industry Association (SIA) – along with a broad coalition of 19 other tech, auto, medical, defense, and other business and labor groups – today in a letter urged Congress to enact funding for the semiconductor manufacturing, research, and design initiatives authorized in the “Creating Helpful Incentives for the Production of Semiconductors” (CHIPS) for America Act. The Senate on June 8 approved $52 billion in funding for CHIPS as part of the U.S. Innovation and Competition Act (USICA), but the House has not yet approved such funding.

The coalition’s letter also calls on leaders in Washington to enact an investment tax credit, as provided in the Facilitating American-Built Semiconductors (FABS) Act, to help build and modernize semiconductor manufacturing facilities in the United States.

[READ THE LETTER]

“Semiconductors are central to America’s economy, national security, and global leadership in strategic technologies, so investing in domestic chip production and innovation is a national priority,” said John Neuffer, SIA president and CEO. “Our message to Congress is simple: America and the world need more semiconductors. Let’s make more of them on U.S. shores. The U.S. Senate has taken a big step forward by approving – with broad, bipartisan support – $52 billion in funding to strengthen U.S. semiconductor manufacturing, research, and design. Now, the House and Senate must chart a path forward to send legislation to President Biden’s desk to be signed into law.”

The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today, according to a report by SIA and the Boston Consulting Group (BCG). This decline is largely due to substantial subsidies 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 remained 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 a separate SIA-BCG study.

The following groups, representing major sectors of the American economy and millions of U.S. workers, signed today’s letter: AdvaMed – Advanced Medical Technology Association, Alliance for Automotive Innovation, American Automotive Policy Council, Autos Drive America, Information Technology Industry Council (ITI), IPC, Motor & Equipment Manufacturers Association (MEMA), National Association of Manufacturers (NAM), National Defense Industrial Association (NDIA), 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 & Engine Manufacturers Association, United Auto Workers (UAW), U.S. Chamber of Commerce, and USTelecom – The Broadband Association.

The full letter is available here and below:

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July 22, 2021

The Honorable Nancy Pelosi                                      The Honorable Kevin McCarthy
Speaker of the House                                                   House Republican Leader
U.S. House of Representatives                                   U.S. House of Representatives
Washington, D.C. 20515                                               Washington, D.C. 20515

The Honorable Charles Schumer                               The Honorable Mitch McConnell
Senate Majority Leader                                                Senate Republican Leader
U.S. Senate                                                                     U.S. Senate
Washington, D.C. 20510                                               Washington, D.C. 20510

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

The undersigned associations and unions, representing major sectors of the American economy and millions of workers, call on Congress to reinvigorate semiconductor manufacturing in the United States and increase semiconductor research by funding the initiatives authorized in the “Creating Helpful Incentives for the Production of Semiconductors” (CHIPS) for America Act and to enact an investment tax credit to help build and modernize more semiconductor manufacturing facilities in America.

Semiconductors play a critical role in enabling the products and services that fuel our economy, contribute to American innovation, provide healthcare to patients, and enhance our national security. Given this central role, strengthening the U.S. position in semiconductor research, design, and manufacturing is a national priority. While the governments of our global competitors have invested heavily to attract new semiconductor manufacturing and research facilities, the absence of comparable U.S. incentives has made our country less competitive and America’s share of global semiconductor manufacturing has steadily declined as a result. To be competitive and strengthen the resilience of critical supply chains, we believe the U.S. needs to incentivize the construction of new and modernized semiconductor manufacturing facilities and invest in research capabilities.

The CHIPS for America Act was authorized in the 2021 defense bill, and the Senate just last month overwhelmingly passed bipartisan legislation including $52 billion in emergency supplemental funding to promote U.S. semiconductor manufacturing (including advanced packaging) and research as part of its competitiveness bill (S. 1260). The Biden Administration has expressed strong support for this funding and included it in its budget request. We call on Congress to expeditiously approve funding for these programs as set forth in the Senate-passed legislation and enact an investment tax credit as provided in the Facilitating American-Built Semiconductors (FABS) Act. These initiatives will help grow the U.S. economy, create hundreds of thousands of good-paying middle-class jobs in advanced manufacturing and other fields, unleash billions in private-sector investments, assure the supply of critical components essential to virtually all sectors of the economy, and strengthen our national security.

The need is urgent and now is the time to act. We look forward to working with you on this national priority.

Sincerely,

AdvaMed – Advanced Medical Technology Association
Alliance for Automotive Innovation
American Automotive Policy Council
Autos Drive America
Information Technology Industry Council (ITI)
IPC
Motor & Equipment Manufacturers Association (MEMA)
National Association of Manufacturers (NAM)
National Defense Industrial Association (NDIA)
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 & Engine Manufacturers Association
United Auto Workers (UAW)
U.S. 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 $208 billion in 2020. SIA represents 98% 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.