The Critical Nexus Between Innovation and Basic Research for the Chip Industry

by Semiconductor Industry Association

A couple weeks ago, the New York Times ran a news story about the future of the semiconductor industry, Smaller, Faster, Cheaper, Over: The Future of Computer Chips (Sept 26, 2012). The premise of the article was that the guiding principle of Moore’s Law is slowing and that unless there are other breakthroughs in chip design, power management, manufacturing, and lithography, the physics of making ever-smaller computer chips will create significant obstacles for the industry and the development of new products. The article appropriately points out the driving determination of semiconductor companies and the creative genius of electrical engineers to continue to innovate by uncovering the industry’s next breakthroughs.

We think it’s important to recognize the critical role of research and development in discovering all of the advances that we enjoy today and all of the advancements still unrealized. And while it’s true that the semiconductor industry spends more money on R&D as a percentage of revenue than any other industry, it is also true that the industry can’t do it alone. There is an important role for the federal government to play in funding the next big breakthrough.

More to the point, the rapid advance of semiconductor technology has led to stunning advances in the products we surround ourselves with, providing the brains in our iPhones, the sensors that help us keep out of harm’s way in our new cars, and the electronic heart of the pacemakers that are tiny packets of life embedded in needy patients. Advances in our industry were made possible by public/private investments in basic research that established the scientific and technical basis for U.S. leadership in this foundational sector.

Our industry recently published Rebooting the IT Revolution: A Call to Action, a seminal report setting down a roadmap to meet the grand challenges needed to continue the progress of Moore’s Law. But the industry cannot do this work alone. We have a successful history of partnering with federal government to fund critical R&D, which represented as much 11% of the total federal budget in the 1960s, but sadly is just 3.5% today.

The federal government can and should do more to invest in R&D to help U.S. industry meet the challenges ahead, make better semiconductors that underpin so many of the things that improve our lives, and stay ahead of the competition overseas.