The forthcoming signing of the CHIPS and Science Act of 2022 (H.R. 4346) will usher in a new era for U.S. manufacturing and the innovation economy. On behalf of the technology industry and entire semiconductor ecosystem, ITI has been the leading advocate for this critical legislation and is proud to join the ceremony at the White House on August 9 to mark its enactment. A Biden Administration priority, this landmark law represents a bipartisan effort that will help the United States continue its technological leadership on the world stage by developing new semiconductor fabrication plants (fabs) on U.S. soil, funding next generation wireless technologies, authorizing new investments into federal scientific research and development, and growing the tech manufacturing workforce.
The United States led the world in technological innovation through the 20th century, spurred in part by federal investment into scientific research and development in the Post-World War II era. These investments yielded commercialized technologies that changed the world - semiconductors, GPS, and the internet, among them. Over time, other nations replicated this investment model and have shifted the geopolitical landscape. In the case of semiconductors, which serve as the backbone of the digital economy and as critical building blocks for products as diverse as automobiles, phones, and medical equipment, the U.S.’s share of global manufacturing capacity slid from almost 40 percent in 1990 to just over 10 percent today, mainly due to foreign government incentives that make building semiconductor fabs 30 percent cheaper overseas.
In response to this trend and its impact on U.S. national and economic security, the U.S. Congress initiated work nearly two years ago on various bipartisan initiatives to invest in the U.S. semiconductor ecosystem, reinvigorate the federal research and development enterprise, and expand the benefits of the innovation economy around the country. The resulting CHIPS and Science Act of 2022 contains many ITI priorities including full funding to implement the Creating Helpful Incentives to Produce Semiconductors (‘CHIPS’) for America Act, funding for U.S. wireless technology leadership, and an investment tax credit for semiconductor manufacturing. Additionally, the bill authorizes new investments in federal R&D and economic development programs, including a new Directorate for Technology, Innovation, and Partnerships at the National Science Foundation, to accelerate domestic development of artificial intelligence, quantum computing, and 6G; a new U.S. Department of Commerce program that will create 20 regional technology hubs to focus on job creation and expanding U.S. innovation capacity; initiatives to support STEM education and workforce; and funding for the Manufacturing USA and Manufacturing Extension Partnership programs.
For years, ITI has called for policies that advance and strengthen a robust U.S. semiconductor ecosystem and expand investment in other next generation technologies. We were strong supporters of earlier bills, including the CHIPS for America Act and the Endless Frontier Act. Among its advocacy efforts, ITI identified investment in domestic semiconductor production as a key priority in its 2022 policy roadmap. ITI’s CEO Jason Oxman published a blog underscoring the need for Congress to pass the measure in March, highlighting ITI’s letter to lawmakers outlining key priorities to consider as they refined the legislation in conference committee. As the bill approached final votes, and ITI named the bill as a “key vote” for lawmakers in the U.S. House of Representatives and U.S. Senate this year.
The ultimate success of this monumental effort will rely on how quickly federal agencies can act to implement the various programs in the bill. The U.S. Commerce Department has a major task ahead of it, standing up the new CHIPS grant program and appropriately vetting applications in an expeditious manner so that investments can start to flow into American jobs. It will also be important for U.S. Congress to follow through to provide the funding authorized for research and economic development activities to realize the benefits envisioned by the bill. This will require meaningful partnership between the U.S. government and industry stakeholders like ITI and its member companies. We look forward to continuing to work with policymakers during this next phase.