Tier 1 Silicon is happy to share about the Biden administration’s recently passed bill in Creating Helpful Incentives to Produce Semiconductors for America Act or the CHIPS for America Act. This bill establishes investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security. As part of this effort, we encourage the president and Congress to invest ambitiously in domestic chip manufacturing and research. Doing so will ensure more of the chips our country needs are produced on U.S. shores while also promoting sustained U.S. leadership in the technology at the heart of America’s economic strength and job creation, national security, and critical infrastructure.
The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37 percent in 1990 to 12 percent today. This decline is primarily due to substantial subsidies offered by our global competitors’ governments, which have placed 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 GDP share, while other governments have invested substantially in research initiatives to strengthen their semiconductor capabilities.
Recognizing the critical role semiconductors play in America’s future, Congress recently 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 for these provisions must come through congressional appropriations. Last week, SIA and a broad coalition of other business leaders called on President Biden to work with Congress to fund the CHIPS provisions for America Act and enact an investment tax credit to spur greater domestic chip production.
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