Our 8-Point Plan to Advance Semiconductor Industry Priorities in 2016

by John Neuffer, President and CEO

SIA has long championed federal policies that promote U.S. innovation, economic growth, and global competitiveness. Now that the 114^th Congress has reached its midpoint and lawmakers have resumed legislative work in the new year, it’s a good time to assess the progress made in 2015 on some of the semiconductor industry’s policy priorities and the work that remains for 2016. [DOWNLOAD SIA’S 2016 POLICY PRIORITIES HERE] 

Trade: With 82 percent of the U.S. semiconductor industry’s customers residing outside the United States, free and fair trade is critical to our industry. SIA helped achieve landmark progress in 2015 on key trade agreements that will strengthen our industry and the economy. In October, negotiators reached agreement on the Trans-Pacific Partnership (TPP), a massive trade deal that will help strengthen our leadership in global markets. A TPP deal was achieved thanks in part to passage of Trade Promotion Authority (TPA) legislation, which SIA actively supported. The next and final hurdle for the TPP is an up-or-down vote by Congress. SIA urges prompt congressional approval of TPP in 2016 and looks forward to working with Congress and the Administration on the best timing to advance the process.

Also on the trade front, negotiators last year reached an historic deal to expand the Information Technology Agreement (ITA). The expanded ITA will be the most commercially valuable agreement for the high-tech sector in decades, eliminating tariffs on roughly one trillion dollars in yearly sales of semiconductors and myriad other tech products. SIA and our members played a pivotal role in getting this landmark agreement across the finish line. Set to take effect on July 1, SIA will in the coming months work to ensure the schedule is kept.

China: As China continues to implement its plan to grow its domestic semiconductor industry, SIA will continue to ensure Beijing meets its international trade commitments and conforms to global norms. In the coming year, we will work with the U.S. government, partners around the world, and policymakers in China to ensure the semiconductor industry there and around the world remains vibrant and competitive and operates in accordance with market principles.

Research: We continue to encourage federal investments in scientific research to ensure the abiding strength of the U.S. semiconductor industry and American innovation. In 2015, we achieved a significant victory in this effort with the announcement of a new White House research initiative called the Nanotechnology-Inspired Grand Challenge for Future Computing. The new initiative was influenced by recommendations from SIA and the Semiconductor Research Corporation (SRC), outlined in a report called Rebooting the IT Revolution: A Call to Action. This progress comes following the President’s launch of a National Strategic Computing Initiative, which aims to build a new federal investment strategy for high-performance computing.

These White House initiatives are a welcome step forward for semiconductor research, as were funding increases for several key federal agencies announced in December as part of the budget agreement. But much work remains. In 2016, SIA will continue to fight for federal research funding and the implementation of programs to advance semiconductor technology.

Tax: Aggressive tax incentives offered by other countries put U.S. companies at a competitive disadvantage in the global market. The semiconductor industry and the overall tech and research communities achieved a major victory at the end of 2015 with congressional approval of a permanent R&D tax credit. A permanent R&D credit will offer U.S. semiconductor companies certainty the U.S. will continue to offer an incentive for domestic research, allowing them to plan investments for years to come. In 2016, SIA will encourage Congress to enact comprehensive tax reform aimed at strengthening research incentives, lowering the corporate tax rate, and moving toward a territorial international system that encourages American companies to invest overseas income in the U.S.

Environment, Health, and Safety: The semiconductor industry is an acknowledged global leader in promoting environmental sustainability in the design, manufacture, and use of its products, as well as the health and safety of its operations and impacts on workers in semiconductor facilities. In 2015, the House and Senate approved legislation to modernize the Toxic Substances Control Act (TSCA), which has not been updated since its enactment in 1976. The new legislation would enhance the protection of health and the environment, while also providing the semiconductor industry and other sectors with certainty in the selection and use of chemicals. In 2016, SIA will encourage lawmakers to reconcile the House and Senate versions of the bill and send the legislation to the President to be signed into law.

Export Controls: Excessive export restrictions on commercial semiconductors stifle the ability of American companies to compete with foreign competitors that do not bear the same export-related administrative and bureaucratic burdens. In 2015, SIA successfully worked with the Administration to achieve regulatory changes that will reduce the burden of controls on commercial products. This year, we’ll continue to work with policymakers to streamline export control regulations to allow U.S. semiconductor companies to effectively compete in the global market.

Anti-counterfeiting: Counterfeit semiconductors pose risks to public health and safety and national security. SIA has long advocated for measures – many of which are outlined in SIA’s anti-counterfeiting white paper – to combat counterfeits. In 2015, we advanced additional procurement regulations that will promote the purchase of trustworthy and authentic semiconductors from authorized sources in all Department of Defense (DoD) contracts. We also successfully advocated for language in the Customs bill to enable Customs and Border Patrol (CBP) to share information with companies on counterfeit chips and improve enforcement. The House and Senate have reached an agreement on the final bill, and we are awaiting further action. In 2016, we’ll work with policymakers to ensure enactment of this legislation and other measures that reduce the supply of counterfeit semiconductors.

Intellectual Property: As a highly research-intensive and technology-driven industry, the protection of intellectual property is paramount to the continued strength of the semiconductor sector. In 2015, SIA supported legislation that would strengthen the protection of trade secrets. In 2016, we’ll work with policymakers to get this legislation enacted. We’ll also push for strengthened intellectual property protection through balanced reforms aimed at reducing abusive patent litigation and further increasing trade secret protections.

The common thread in this 8-point plan is that our industry can only thrive in a policy eco-system that places a high premium on the promotion of technological advancement and innovation. SIA looks forward to working with policymakers in the year ahead to take forward initiatives that strengthen our sector, which is so critical to the social fabric, economy, and national security of America.