Broad Coalition Urges Congress to Fund CHIPS Act, Enact Strengthened FABS Act

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The Semiconductor Industry Association (SIA) — along with a broad coalition of 20 other tech, auto, medical, defense, and other business and labor groups — in a letter urged Congress to immediately enact $52 billion to fund the CHIPS Act and to enact a strengthened FABS Act to bolster domestic semiconductor research, design, and manufacturing. The letter’s signatories represent major sectors of the American economy and millions of U.S. workers.

The House of Representatives on Feb. 4 passed CHIPS Act investments totaling $52 billion as part of the America COMPETES Act. The Senate passed the same level of funding for the CHIPS Act as part of its version of competitiveness legislation, the United States Competition and Innovation Act (USICA), in June 2021. The House and Senate must now reach agreement on joint competitiveness legislation containing CHIPS Act investments that can be passed by both chambers and signed into law by President Biden. Congress is also 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.

“Semiconductors are at the heart of America’s economic growth, technology leadership, and national security, so investing in the future of domestic chip production and innovation is a national priority,” said John Neuffer, SIA president and CEO. “Today’s letter demonstrates the breadth of support – throughout a range of sectors of our economy – for enactment of bipartisan, bicameral competitiveness legislation that includes $52 billion to fund the CHIPS Act, as well as enactment of a strengthened FABS Act. Federal investments in the U.S. semiconductor ecosystem will spur hundreds of billions of dollars in private investments, create hundreds of thousands of American jobs, and strengthen our economy and supply chains for the long term. It’s time to get these initiatives across the finish line.”

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 manufacturing 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, 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 an SIA-BCG study.

The following groups, representing major sectors of the American economy and millions of U.S. workers, signed today’s letter: AdvaMed, Alliance for Automotive Innovation, American Automotive Policy Council (AAPC), Autos Drive America, Business Roundtable (BRT), CTIA, Information Technology Industry Council (ITI), IPC – Build Electronics Better, Motor & Equipment Manufacturers Association (MEMA), National Defense Industrial Association (NDIA), National Electrical Manufacturers Association, North America’s Building Trades Unions (NABTU), SEMI, Semiconductor Industry Association (SIA), Software & Information Industry Association (SIIA), Tech CEO Council, TechNet, Telecommunications Industry Association (TIA), Truck and Engine Manufacturers Association (EMA), U.S. Chamber of Commerce, and USTelecom – The Broadband Association.