SIA Echoes National Security Leaders’ Call for Swift Enactment of Competitiveness Legislation, Including Chip Manufacturing and Research Investments

WASHINGTON—The Semiconductor Industry Association (SIA) released the following statement from President and CEO John Neuffer in support of a letter sent today from top national security leaders to congressional leadership encouraging swift passage of comprehensive, bipartisan competitiveness legislation, which would fund efforts critical to strengthening America’s technological edge and national security, including the CHIPS for America Act.

“Strong domestic semiconductor production, innovation, and supply chains are essential to reinforcing America’s technological edge and national security, as we work to out-innovate our competitors and maintain our leadership position. SIA joins defense and intelligence leaders in urging Congress to swiftly pass legislation investing in domestic chip manufacturing and research and send to the President’s desk to be signed into law. Doing so will fuel American leadership in the critical, chip-enabled technologies underpinning U.S. national security.”

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 for decades, 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. SIA has called for enacting this legislation and expanding it to cover both semiconductor manufacturing and design.

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.