Three Ways the TPP Strengthens the Semiconductor Industry

by Semiconductor Industry Association

SIA today testified at a hearing of the U.S. International Trade Commission (ITC) about the critical importance of the Trans-Pacific Partnership (TPP) to the U.S. semiconductor industry and the U.S. economy. Our core message was that trade is vital to the semiconductor industry’s ability to compete, innovate, and grow. SIA highlighted three specific ways the TPP promotes trade and strengthens our industry.

1) The TPP would increase access to the huge and fast-growing markets in the Asia-Pacific region. U.S. exports of semiconductors to TPP countries accounted for 41 percent of total U.S. semiconductor exports to the world in 2014 ($17 billion), and the broader Asia-Pacific region represents an enormous 85 percent of total U.S. semiconductor exports. The success and growth of our industry depends heavily on access to customers in this region.

2) The TPP would strengthen the global semiconductor supply chain. The globalization of our industry has greatly contributed to the growth of U.S. semiconductor companies as it enables them to leverage the technological skill and cost advantages of countries to source technology, equipment, services, R&D, and capabilities on a scale never before thought possible. By eliminating a range of tariff and non-tariff barriers, the TPP would reinforce the semiconductor supply chain and better enable companies to achieve efficiency, lower costs, and reduce risks.

3) The TPP would update trade rules to reflect the way trade is done in the 21st Century. Today, goods are often shipped through digital pipelines, not just giant freighters, and it’s important for trade agreements to keep pace with the times. The TPP creates high-standard rules that will help combat growing global trade barriers and challenges facing the semiconductor industry, including strong commitments related to encryption in commercial products, trade secret and other IP protection, tariff elimination on tech products, state-owned-enterprise (SOE) requirements to act on a commercial basis, and cross-border data flows. The TPP is the template for the future of the global trading system, ensuring that free and open markets – not discrimination and protectionism – will be the hallmarks of 21st Century trade.

SIA urges swift congressional approval of TPP and looks forward to working with Congress and the Administration as the process moves forward.