Semiconductor Leaders Reach Agreement on Global Policy Recommendations

by Semiconductor Industry Association

WORLD SEMICONDUCTOR COUNCIL TO PRESENT PROPOSALS TO GOVERNMENTS

WASHINGTON—May 27, 2016—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today welcomed recommendations agreed to by global semiconductor industry leaders at the 20th annual meeting of the World Semiconductor Council (WSC) this week in Seoul, Korea. The agreement outlines a series of policy proposals to strengthen the industry through greater international cooperation. The WSC is a worldwide body of semiconductor industry executives from China, Chinese Taipei, Europe, Japan, Korea, and the United States that meets annually to address issues of global concern to the semiconductor industry. Recommendations from this year’s meeting are included in the 2016 WSC Joint Statement.

“The World Semiconductor Council provides a unique and much-needed forum for global industry leaders to develop sound policy recommendations to strengthen the semiconductor industry and the global economy,” said Dr. Necip Sayiner, President, CEO & Director of Intersil Corporation and 2016 SIA Chairman. “The recommendations agreed to by the WSC this week will facilitate trade, increase consumer access to semiconductor-enabled products, and strengthen the global semiconductor industry for years to come.”

A primary goal of the WSC, reaffirmed this week, is to ensure timely implementation of the expanded Information Technology Agreement (ITA), which is set to take effect on July 1. The expanded ITA covers an estimated $1.3 trillion in global sales of tech products and eliminates tariffs on new and innovative semiconductor products, including multi-component semiconductors (MCOs). This is the first expansion of the ITA since 1996, when the agreement was originally concluded.

The WSC also reaffirmed government policies should be guided by market-based principles and committed to continuing dialogue with relevant governments to promote fair, transparent, and non-discriminatory practices with regard to government support programs. Industry leaders in attendance also made significant progress on the following initiatives:

• Regional Support – Agreed to host a workshop in Berlin this October at the upcoming Governments/Authorities Meeting on Semiconductors (GAMS) to discuss best practices for government support of the semiconductor industry in a way that is consistent with international commitments and promotes fair, market-based competition.
• Encryption – Continue industry-government dialogue to ensure open global market access for commercial encryption products by encouraging the adoption of international standards and transparent, non-discriminatory procedures and rules.
• Protection of Intellectual Property – Support national legislative initiatives to strengthen protection of trade secrets. Work with the World Intellectual Property Organization (WIPO) to ensure highly innovative patents.
• Semiconductor Customs Classification – Agreed on a definition of “semiconductor-based transducers” and seek to work with customs authorities to amend the World Customs Organization Harmonized System to include these products under the semiconductor heading 8541. Work with customs authorities to align different classifications of semiconductor products under semiconductor headings 8541 and 8542.
• Anti-counterfeiting – Strengthen cooperation with global customs and law enforcement agencies to combat semiconductor counterfeiting.
• Environment, Safety and Health – Continue successful efforts to reduce the industry’s PFC (perfluorocompound) emissions, increase energy efficiency, and call on governments to take into account the industry’s use and management practices when regulating essential chemicals.
• Growth Initiative – Promote semiconductor-enabled energy efficiency through the inclusion of semiconductor products in the Environmental Goods Agreement (EGA).
• Tax – Reduce the potentially harmful impact of the OECD Base Erosion and Profit Shifting (BEPS) Action Plan by adopting measures to protect confidentiality of country-by-country (CBC) reports, local and master files. Call on governments to refrain from using CBC reports as the basis for assessing deficiencies and seeking CBC report information directly from companies.

Industry officials from the six regions represented in the WSC will deliver these recommendations to an annual meeting of their governments, called the GAMS, set to take place in Berlin, Germany in October. The GAMS meeting represents an opportunity for industry to convey the importance of implementing the recommendations and explore areas of mutual interest with governments worldwide.

“Given the highly globalized nature of the semiconductor industry, the opportunities and challenges facing our sector are best addressed using global approaches,” said Ajit Manocha, SIA Board Member and former CEO of GLOBALFOUNDRIES. “The recommendations developed this week by the WSC are a bright and shining example of international collaboration that will benefit government, industry, and consumers the world over.”

For more information on the Semiconductor Industry Association, visit www.semiconductors.org.

For more information on the World Semiconductor Council, visit www.semiconductorcouncil.org.

About SIA

The Semiconductor Industry Association (SIA) is the voice of the U.S. semiconductor industry, one of America’s top export industries and a key driver of America’s economic strength, national security, and global competitiveness. Semiconductors – microchips that control all modern electronics – enable the systems and products we use to work, communicate, travel, entertain, harness energy, treat illness, and make new scientific discoveries. The semiconductor industry directly employs nearly a quarter of a million people in the U.S. In 2015, U.S. semiconductor company sales totaled $166 billion, and semiconductors make the global trillion dollar electronics industry possible. SIA seeks to strengthen U.S. leadership of semiconductor manufacturing, design, and research by working with Congress, the Administration and other key industry stakeholders to encourage policies and regulations that fuel innovation, propel business and drive international competition. Learn more at www.semiconductors.org.