Semiconductor leaders urge action on industry funding

Industry groups wrote to Congressional leaders today urging them to follow through on their commitment to the semiconductor industry.

In a letter to leaders on both sides of the House and the Senate, 20 industry organizations and union groups complained that a key piece of legislation designed to stimulate domestic semiconductor manufacturing remained unfunded.

The Creating Helpful Incentives for the Production of Semiconductors (CHIPS) act, proposed last June and subsequently passed as part of the National Defense Authorization Act, legislated a 40% refundable tax credit for organizations building chip fabrication plants in the US. It also promised $10 billion in federal funds to match state incentives for factories and funding for Department of Defense research and development around semiconductors.

However, that legislation didn't provide the funds, which remain unavailable. The letter's signatories, including the Semiconductor Industry Association, The Telecommunications Industry Association, and the Alliance for Automotive Innovation along with trade unions, warned that carving out the money is now a national priority.

"While the governments of our global competitors have invested heavily to attract new semiconductor manufacturing and research facilities, the absence of comparable U.S. incentives has made our country less competitive and America’s share of global semiconductor manufacturing has steadily declined as a result," it complained.

Some funding for the CHIPS act has already trickled through via the United States Innovation and Competition Act (USICA), passed in June. It includes $52 billion in funding for domestic chip production over the next five years.

In June, senators also introduced the Facilitating American-Built Semiconductors (FABS) Act, which would create a 25% tax credit for domestic semiconductor manufacturing facilities and tools.

Now, Congress must make good on those promises by actually approving funding for these programs, the letter said.

"The Biden Administration has expressed strong support for this funding and included it in its budget request," it said. "We call on Congress to expeditiously approve funding for these programs as set forth in the Senate-passed legislation and enact an investment tax credit as provided in the Facilitating American-Built Semiconductors (FABS) Act."

"These initiatives will help grow the U.S. economy, create hundreds of thousands of good-paying middle-class jobs in advanced manufacturing and other fields, unleash billions in private-sector investments, assure the supply of critical components essential to virtually all sectors of the economy, and strengthen our national security," the letter concluded.