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Semiconductors in America Coalition Forms

May 13, 2021

A cross-sector alliance of semiconductor companies and major downstream users of semiconductors from a range of important sectors formed the Semiconductors in America Coalition (SIAC) and called on congressional leaders to appropriate $50 billion for domestic chip manufacturing incentives and research initiatives. SIAC’s mission is to advance federal policies that promote semiconductor manufacturing and research in the U.S. to strengthen America’s economy, national security, and critical infrastructure.

SIAC’s primary focus is to secure funding for the CHIPS for America Act, legislation enacted earlier this year that authorized – but did not fund – needed semiconductor manufacturing incentives and research initiatives. In one of its first actions, SIAC today sent a letter to congressional leaders in support of legislation to advance the bipartisan effort to fully fund the CHIPS for America Act.

[DOWNLOAD SIAC’S LETTER TO CONGRESSIONAL LEADERSHIP]

The push has the strong backing of President Biden, who has called for $50 billion to fund the CHIPS for America Act. Such funding could also be considered as part of the bipartisan Endless Frontier Act (S.1260), legislation introduced last month by Sens. Chuck Schumer (D-N.Y.) and Todd Young (R-Ind.). The Senate Commerce Committee is scheduled to mark up the Endless Frontier Act tomorrow.

“Semiconductors are the brains of the systems and technologies that enable America’s economic growth, national security, digital infrastructure, and global technology leadership,” said John Neuffer, president and CEO of the Semiconductor Industry Association (SIA), whose members joined with other companies in the semiconductor ecosystem and leaders in downstream sectors to form SIAC. “Leaders from a broad range of critical sectors of the U.S. economy, as well as a large and bipartisan group of policymakers in Washington, recognize the essential role of semiconductors in America’s current and future strength. The Semiconductors in America Coalition looks forward to working with Congress and the Biden Administration to enact needed federal investments in domestic semiconductor manufacturing and research, as called for in the CHIPS for America Act, so more of the chips our country needs are produced on U.S. shores.”

In addition to SIA member companies, SIAC members include Amazon Web Services, Apple, AT&T, Cisco Systems, General Electric, Google, Hewlett Packard Enterprise (HPE), Microsoft, and Verizon. In its letter to congressional leaders, SIAC members stated the current global chip shortage has highlighted the need to ensure a stronger and more resilient domestic semiconductor supply chain over the long term:

“The current shortage of semiconductors is impacting a broad range of industries throughout the economy. To address this problem in the short term, government should refrain from intervening as industry works to correct the current supply-demand imbalance causing the shortage. But for the longer term, robust funding of the CHIPS Act would help America build the additional capacity necessary to have more resilient supply chains to ensure critical technologies will be there when we need them.”

The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today. This decline is largely due to substantial subsidies 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.

Last month, SIA and the Boston Consulting Group released a report examining the global semiconductor supply chain and outlining government actions needed to strengthen it, including enacting federal investments in semiconductor manufacturing and research.

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