The Semiconductor Industry Association (SIA) applauded congressional introduction of the Endless Frontier Act (S.1260), bipartisan legislation that seeks to maintain and build on U.S. science and technology leadership – including in semiconductors – by restructuring the National Science Foundation and authorizing more than $100 billion for science and technology initiatives. The legislation was introduced in the Senate today by Sens. Chuck Schumer (D-N.Y.) and Todd Young (R-Ind.) and a bipartisan group of cosponsors. SIA represents 98% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.
“Semiconductors are fundamental to America’s economy, national security, and global competitiveness, and the country that leads in chip technology will have a big leg up in deploying the game-changing technologies of the future,” said John Neuffer, SIA president and CEO. “We applaud introduction of the Endless Frontier Act and thank its sponsors for their bipartisanship and leadership in promoting American innovation and competitiveness, and we look forward to working with the Biden administration and Congress to further this effort by investing boldly in domestic semiconductor manufacturing and research.”
The Endless Frontier Act is an important part of a series of competitiveness measures needed to reinforce U.S. leadership in critical technologies, including semiconductors. The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today, according to a report by SIA and the Boston Consulting Group (BCG). 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.
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 new law calls for incentives for domestic semiconductor manufacturing and investments in chip research, but funding must be provided to make these provisions a reality.
The SIA/BCG report found a $50 billion federal investment in domestic semiconductor manufacturing incentives would reverse the trajectory of declining chip production in America and create as many as 19 major semiconductor manufacturing facilities, or fabs, and 70,000 direct high-paying jobs in the U.S. over the next 10 years, which by SIA calculations could create roughly an additional 350,000 indirect jobs throughout the economy (for a total of over 400,000 direct and indirect jobs).
President Biden has called for $50 billion to fund the semiconductor manufacturing and research provisions in the CHIPS for America Act. In February, the SIA board of directors – and later a broad coalition of business leaders led by SIA – called on President Biden to work with Congress to fund the semiconductor manufacturing incentives and research initiatives .
Earlier this month, SIA and BCG released a new report examining the global semiconductor supply chain and outlining government actions needed to strengthen it, including enacting federal investments in semiconductor manufacturing and research.