The Semiconductor Industry Association (SIA) today applauded introduction in the Senate of the American Foundries Act of 2020, legislation that would provide federal investments totaling tens of billions of dollars for semiconductor manufacturing and research to help ensure America’s continued leadership in chip technology, which is fundamental to our country’s economy and national security. The bipartisan bill was introduced today by Sens. Tom Cotton (R-Ark.), Chuck Schumer (D-N.Y.), Jim Risch (R-Idaho), Jack Reed (D-R.I.), Josh Hawley (R-Mo.), Angus King (I-Maine), Susan Collins (R-Maine), Kirsten Gillibrand (D-N.Y.), Marco Rubio (R-Fla), and Doug Jones (D-Ala.).
“U.S. companies have led the world in semiconductor technology for decades, but over the years governments of overseas competitors have offered aggressive incentives for advanced chip manufacturing to relocate,” said Keith Jackson, President, CEO, and Director of ON Semiconductor and 2020 SIA chair. “To reverse that trend and keep America in front in chip technology, we need to invest ambitiously in domestic semiconductor manufacturing and research. We commend the bipartisan group of bill sponsors for their leadership in addressing this challenge and urge Congress to move forward with legislation to incentivize semiconductor manufacturing and expand semiconductor research.”
The U.S. currently maintains a stable chip manufacturing footprint, but the trend lines are concerning. There are commercial semiconductor manufacturing facilities, or “fabs,” in 18 states, and semiconductors ranked as our nation’s fifth-largest export in 2019. Significant semiconductor manufacturing incentives, however, have been put in place by other countries, and U.S. semiconductor manufacturing growth lags behind these countries due largely to a lack of federal incentives.
The American Foundries Act includes a range of federal investments to advance U.S. semiconductor manufacturing, including a $15 billion federal grant program that would incentivize new domestic semiconductor manufacturing and R&D facilities. The bill also authorizes $5 billion for public-private collaboration on the construction or modernization of fabs for national security, intelligence, and critical infrastructure.
Research is critical to advancing semiconductor innovation in the U.S. American semiconductor design and manufacturing companies invest approximately one-fifth of revenue in R&D, almost $40 billion in 2019, representing the second-highest rate of research investment of any industry. Federal government investment in semiconductor research, however, is only a small fraction of total semiconductor R&D in the U.S. and has been relatively flat as a share of GDP for many years. Meanwhile, China and others are increasing their government research investments.
The American Foundries Act would authorize $5 billion in new federal investments to promote semiconductor research at the Department of Defense, National Science Foundation, Department of Energy, and the National Institute of Standards and Technology. The bill also mandates that the White House Office of Science and Technology, in coordination with federal research agencies and the private sector, develop a plan to guide funding for advancing next-generation semiconductors.
“The U.S. simply cannot afford to cede more ground to competing countries in the production of semiconductor technology, which is the bedrock of our country’s digital economy and defense systems,” said John Neuffer, President and CEO of the Semiconductor Industry Association. “We applaud the bipartisan group of leaders in Congress for introducing this important and timely bill and urge Congress to work collaboratively to strengthen the bill and bolster domestic semiconductor manufacturing and research. Doing so will help ensure America continues to lead the world in semiconductors and the many technologies they enable, including influential future technologies like artificial intelligence, quantum computing, and advanced wireless networks.”
