What They’re Saying: Fund the CHIPS for America Act

by David Isaacs, Vice President, Government Affairs

A diverse set of stakeholders, representing broad cross-sections of U.S. industry, government, and academia, have called on Congress to fund the CHIPS for America Act. From automobile manufacturers and cloud companies to the U.S. Chamber of Commerce and local governments, there is widespread recognition that Congress must cement America’s role as the undisputed global leader in semiconductors.

Though largely functioning behind the scenes, chips underpin technologies that are critical to modern life, including car engines and energy grid management systems. Additionally, semiconductors are the building blocks of the “must-win” technologies of the future, including artificial intelligence, quantum computing, and advanced wireless networks such as 5G, and also play a key role advancing our national security. In an alarming trend, however, the U.S. share of global semiconductor manufacturing capacity has declined from 37 percent in 1990 to just 12 percent today. This is largely due to governments around the world providing immense cash grants and tax incentives often exceeding 40 percent of the cost to construct and operate a fab.

A broad range of stakeholders across the nation are calling for robust CHIPS funding. The following are a few examples of the many groups urging Congress to take action:

Verizon – “To help mitigate future risks to the supply of semiconductors, Verizon supports policies like those created by the CHIPS Act that was passed in 2020, and awaits Congressional funding. U.S. support for private investments in semiconductor manufacturing in the United States will help to lower the risk of future supply chain disruptions in the U.S. and globally.”

Aerospace Industries Association (AIA) – “The CHIPS Act, which provides critical authorizations to addresses many of the identified semiconductor IC supply chain short falls, was enacted but the necessary appropriations to implement the law were not provided. We recommend Congress fund the CHIPS Act to level the playing field for U.S. semiconductor IC manufacturing…”

Motor & Equipment Manufacturers Association (MEMA) – “[W]e can never forget the edge that the creativity, ingenuity, and entrepreneurial spirit that is inherent in the U.S. technology and manufacturing sectors. The U.S, is among the world leaders in semiconductor design and engineering; passage of the CHIPS Act simply enables us to build on that success. For these reasons, MEMA strongly supports the CHIPS Act.”

Georgetown Center for Security and Emerging Technology (CSET) – “We recommend fully funding the manufacturing grant program in the CHIPS for America Act. Sufficient incentives would reverse the decades-long decline in the U.S. share of wafer capacity, which has been driven in part by large subsidies offered to chipmakers by Taiwan, South Korea, and China.”

Investing in semiconductor research and manufacturing will help the U.S. retain its leadership in this critical technology and stimulate economic and national security dividends far exceeding what we put in. According to a recent report, each additional dollar invested in federal semiconductor research increases U.S. gross domestic product by $16.50. Given that the semiconductor industry already supports 1.25 million jobs in America, these investments would only further expand our well-paid manufacturing workforce.

Last year, SIA called on the government to make substantial investments in the semiconductor industry, and leaders responded decisively. The CHIPS for America Act (H.R. 7178/ S. 3933) was introduced by Sens. Cornyn (R-TX) and Warner (D-VA) and Reps. Matsui (D-CA) and McCaul (R-TX), and authorization of incentives for semiconductor manufacturing and investments in semiconductor research were enacted into law as part of the FY21 National Defense Authorization Act (NDAA). It is now time to fund these initiatives and make them a reality.

To secure America’s supply of this critical technology, as well as to cement the nation’s role as the undisputed leader in innovation, we urge Congress to fund the CHIPS for America Act to help secure our economic and national security in the 21st century.