SIA Applauds Release of House Competitiveness Legislation

America COMPETES Act includes $52 billion to fund the semiconductor research, design, and manufacturing provisions in the CHIPS for America Act

WASHINGTON—The Semiconductor Industry Association (SIA) today issued the following statement from President and CEO John Neuffer regarding yesterday’s release in the House of Representatives of competitiveness legislation called the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (America COMPETES) Act of 2022. The legislation includes $52 billion to fund the semiconductor research, design, and manufacturing provisions in the CHIPS for America Act. The Senate passed funding for the CHIPS Act as part of the bipartisan United States Competition and Innovation Act (USICA) in June 2021.

“America’s economy, national security, and global competitiveness are built on semiconductors. We applaud the release in the House of Representatives of the America COMPETES Act, which includes $52 billion to fund incentives for domestic semiconductor manufacturing and investments in chip research. We appreciate the leadership of Speaker Pelosi in advancing this legislation in the House and look forward to the House and Senate negotiating compromise legislation that can be sent to the president for his signature. This critical funding will help ensure more of the chips Americans need are researched, designed, and manufactured on U.S. soil, strengthening our supply chains and creating new, high-paying American jobs across the country.”

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 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 behind 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 a separate SIA-BCG study.

SIA also supports a semiconductor investment tax credit, as called for by the FABS Act, to complement the manufacturing incentives and research investments in the CHIPS Act. Congress is considering separate legislation containing a modified version of the FABS Act to provide an investment tax credit to incentivize semiconductor manufacturing in the United States.

Recognizing the critical role semiconductors play in America’s future, Congress in January enacted the CHIPS for America Act as part of the FY 2021 National Defense Authorization Act (NDAA). The law authorized incentives for domestic semiconductor manufacturing and investments in chip research, but funding must be provided to make these provisions a reality. Funding the CHIPS Act, along with enactment of a strengthened FABS Act, are complementary efforts and will help enhance the global competitiveness of the U.S. semiconductor industry.