SIA: The United States will hold a meeting or reconcile differences between the US Senate and House of Representatives on the "chip bill"

On May 12, 2022, Washington time, SIA released a statement from SIA Chairman and CEO John Neuffer welcoming the first meeting of the Congressional Conference Committee charged with negotiating final competitiveness legislation to be approved by both chambers and by President Biden Sign into law. Senator Maria Cantwell (D-Wash.), chair of the Commerce, Science and Transportation Committee, will chair the meeting at 10 a.m. (Washington time) on the 12th. Representative Eddie Bernice Johnson (D-Texas), chairman of the House Science, Space and Technology Committee, will lead the House delegation.

"Leaders in Washington have a historic opportunity to enact competitiveness legislation that strengthens the U.S. economy and national security, enhances America's technological advantage, and strengthens America's leadership in semiconductor research, design, and manufacturing for decades to come. We welcome the first meeting of the Conference Committee and urge swift action to advance bipartisan legislation to fund the CHIPS Act and create FABS Act investment tax incentives for semiconductor manufacturing and design."

On February 4, 2022, the House of Representatives passed key CHIPS Act investments totaling $52 billion to enhance domestic semiconductor manufacturing and research as part of the competitiveness legislation, the America Competition Act. The Senate passed roughly the same funding as the CHIPS Act in June 2021 as part of its version of competitiveness legislation, the United States Competition and Innovation Act (USICA). House and Senate leaders must now work to reconcile differences in the bill and pass bipartisan legislation to be signed by the president.

The investment tax credit for semiconductor manufacturing and design required by the House of Representatives FABS Act is an important addition to USICA and America COMPETES' manufacturing incentives and research investments. The House's FABS bill should be included in the competitiveness legislation being negotiated.

The share of modern semiconductor manufacturing capacity located in the United States has fallen from 37% in 1990 to 12% today. This decline is primarily due to the substantial manufacturing incentives provided by our global rival governments, putting the U.S. at a competitive disadvantage in attracting new semiconductor manufacturing facilities, or "fabs" construction. In addition, federal investment in semiconductor research as a percentage of GDP has been flat, while other governments have invested heavily in research programs to strengthen their own semiconductor capabilities, and existing U.S. R&D tax incentives also lag behind other countries. Furthermore, according to a SIA-BCG study, vulnerabilities in the global semiconductor supply chain have emerged in recent years and must be addressed through government investment in chip manufacturing and research.

A combination of grants, tax breaks, and research investments are needed to drive U.S. semiconductor production and innovation. Enacting the House FABS Act and funding the CHIPS Act are important components of this holistic, complementary approach that can strengthen U.S. semiconductor capabilities over the long term.