According to the Wall Street Journal, the U.S. semiconductor industry is stepping up its lobbying efforts to obtain billions of dollars of federal funds for plant construction and research, so that the U.S. is ahead of China and other countries that heavily subsidize its chip industry.
According to the report, the semiconductor industry association (SIA), a trade organization, has proposed a $37 billion (263.3 billion) proposal, which includes subsidies for the construction of new chip factories, assistance for States seeking to attract semiconductor investment and increased funding for research.
At the same time, the government and Congress are trying to meet the dual challenges: reducing the U.S. dependence on technology products in Asia and effectively competing with China. The global influenza pandemic has deepened these issues and reignited the debate about the role of governments in encouraging innovation.
Robert Atkinson, President of the information technology & innovation foundation, an industry think-tank, said: 'the increasingly tense relationship with China has driven us toward our national industrial strategy. In the past, it was about protecting steel. Now the consensus is more about helping sunrise industries.
Industry officials believe that the expected legislation and additional coronavirus relief funds, the annual defense authorization act and some emerging technology bills can be used as potential means of the proposal.
Although it is unlikely to accept the SIA's recommendations without modification, influential lawmakers and executives, including commerce secretary Wilbur Ross and Secretary of state Mike Pompeo, are looking at ways to help the industry.
Mr. Ross said:
A state Department spokesman said the state is working closely with Congress and industry to ensure that the future of the semiconductor industry remains in the United States.
In Congress, bipartisan lawmakers, led by Senate minority leader Chuck Schumer and Senator Todd young, proposed an additional $110 billion in technology spending, including semiconductor research. Senator Tom cotton is working on a bill to reflect some of the SIA's recommendations.
Cotton Senator spoke of China:
The scale of the technical proposal far exceeds expectations in recent years. Since the mid-1980s, federal funding for R & D has fallen by about half as a percentage of GDP.
Compared with the countries SIA talked about that the u.s. might lose in the competition, the wall street journal said, the latter is more generous with semiconductor incentives, especially in china. computer chips are the foundation of some of the most important business and defense technologies in the future, they say, including five G of networks and artificial intelligence, in which the trump administration wants to stay ahead of global competitors.
SIA estimates that by 2030, china's share of global chip production capacity will almost double to around 28%, although it includes output from foreign companies in china (such as Intel C and GlobalFoundries). They are one of the world's largest chipmakers, but, stimulated by subsidies, they have turned to Asia, Israel and Ireland, where only 12% of chips are produced in the United States.
SIA proposal includes $5 billion in federal funding for a new semiconductor plant that will work with the private sector to finance and operate. In a letter to defense officials, Intel CEO Bo
Another $15 billion will be allocated as a lump sum to States, which can be used to provide incentives for new semiconductor manufacturing facilities. According to the SIA draft proposal, the remaining $17 billion will increase the federal research pool, including $5 billion for basic research, $7 billion for applied research and $5 billion for new technology centers.
SIA President and CEO John Neuffer said:
Some experts warn that the US should not try to compete with China for subsidies. Peterson Institute for International Economics Chinese expert Nicholas Lardy says China is not competitive with the US in advanced semiconductor technology, despite spending tens of billions of dollars to subsidize its chip industry. He said:
From manufacturers to chip-design companies to manufacturers of manufacturing equipment, the semiconductor industry is divided on how to design aid.
For example, a large grant was criticized by an industry source who briefed the plan on the proposal because states often compete with each other rather than with China.
Whether the plan will benefit mainly large companies further consolidates their share of U.S. manufacturing, and the industry is divided. SIA is trying to win industry recognition by extending the proposal to benefit many areas of the industry, people familiar with the matter said.
Also, SEMI, representing chipmakers and other organizations, have been pushing for investment tax credits to buy machines for months. Ajit Manocha, SEMI president and chief executive, said the credit
Two Texas Republicans, Senator John Cornyn and Representative Michael McCaul are working on a bill that would include an investment tax credit, according to congressional aides. Such provisions are included in SIA recommendations.
Modern chip factories usually cost more than $10 billion to build, and rising costs have been a major factor in reducing private investment in US manufacturing in recent years. Headquartered in Santa Clara, California, but owned by Abu Dhabi, global foundries decided two years ago to stop developing the state-of-the-art chip manufacturing technology of the time for cost reasons.
The industry's proposal comes after Trump's government asked TSMC for help. The world's largest contract chip manufacturer said it would spend $12 billion to build a chip factory in Arizona between next year and 2029.
Some U.S. chipmakers and lawmakers complain that the money should go to U.S. companies willing to build factories and then mortgage to foreign companies. Mr Schumer's state is home to several large chip factories, including one run by GlobalFoundries. Two other lawmakers criticized the investment
According to SIA's plan, the funds will be dedicated to facilities in the United States, but can be used by domestic and foreign companies.
Although SIA said its plan was not popular, the $5 billion in OEM development costs were seen by industry and government as the driving force behind Intel's factory building, not foreign manufacturers.