SIA Applauds Start of Conference Negotiations on Bicameral Competitiveness Legislation

Policymakers must swiftly enact compromise bill that includes $52 billion to fund the CHIPS Act, as well as an investment tax credit for semiconductor manufacturing and design

WASHINGTON – The Semiconductor Industry Association (SIA) today released the following statement from SIA President and CEO John Neuffer applauding the formal start of a congressional conference to negotiate final competitiveness legislation that can be approved by both chambers and signed into law by President Biden. The Senate today took a series of procedural steps that allow the conference process to begin.

“Leaders in Washington from both parties recognize that to lead the future, America must lead in semiconductors. Semiconductors are essential to America’s continued economic and national security, as well as its ability to compete and win in the game-changing technologies of today and tomorrow.

“The start of conference negotiations is a critical step toward enactment of bipartisan competitiveness legislation that strengthens domestic semiconductor research, design, and manufacturing. The time to act is now. Every day that passes is day we risk falling behind global competitors. We urge Congress to work expeditiously to reach agreement on a bill that funds the CHIPS Act, provides an investment tax credit for semiconductor manufacturing and design, and sharpens America’s technological edge for decades to come.”

On Feb. 4, 2022, the House passed critical CHIPS Act investments totaling $52 billion to strengthen domestic semiconductor manufacturing and research as part of competitiveness legislation, the America COMPETES Act. The Senate passed the same level of funding for the CHIPS Act as part of its version of competitiveness legislation, the United States Competition and Innovation Act (USICA), in June 2021. House and Senate leaders must now work on reconciling differences in the bills and passing bipartisan legislation to be signed by the president.

An investment tax credit for semiconductor manufacturing and design, as called for by the FABS Act introduced in the House, is an important complement to the manufacturing incentives and research investments in USICA and America COMPETES. The House FABS Act should be included in the competitiveness legislation set to be negotiated.

The share of modern semiconductor manufacturing capacity located in the U.S. has decreased from 37% in 1990 to 12% today. This decline is largely due to substantial manufacturing incentives offered by the governments of our global competitors, placing the U.S. at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities, or “fabs.” Additionally, federal investment in semiconductor research has been flat as a share of GDP, while other governments have invested substantially in research initiatives to strengthen their own semiconductor capabilities, and existing U.S. tax incentives for R&D lag those of other countries. Furthermore, global semiconductor supply chain vulnerabilities have emerged in recent years that must be addressed through government investments in chip manufacturing and research, according to an SIA-BCG study.

A combination of grants, tax credits, and research investments is needed to turbocharge U.S. semiconductor production and innovation. Enacting the House FABS Act and funding the CHIPS Act are essential components of this holistic, complementary approach to strengthening America’s semiconductor capabilities over the long term.