U.S. Senators Charles E. Schumer (D-NY) and Kirsten Gillibrand (D-NY), and U.S. Representatives Paul Tonko (D-NY-20) and John Katko (R-NY-24) called on the Biden administration to invest in U.S. semiconductor production by funding federal semiconductor manufacturing and R&D incentive provisions that were signed into law as part of the FY21 National Defense Authorization Act (NDAA). The lawmakers are urging the administration to fund and implement these important provisions to increase federal support for semiconductor manufacturing, provide new federal incentives to conduct advanced research and development of semiconductor technology, secure the supply chain, and strengthen national and economic security by reducing reliance on foreign semiconductor manufacturing.
“The economic and national security risks posed by relying too heavily on foreign semiconductor suppliers cannot be ignored, and Upstate New York, which has a robust semiconductor industry, is the perfect place to grow domestic semiconductor R&D and manufacturing by leaps and bounds,” said Senator Schumer. “America must continue to invest in our domestic semiconductor industry in order to keep good-paying, high-tech American manufacturing jobs here in Upstate New York. We now must move quickly to pass the necessary funding to stand up the programs we passed into law last year and bring us one step closer to ensuring our domestic semiconductor industry can safely and securely supply our military, intelligence agencies, and other government needs. This is a step essential to growth in high-tech R&D, manufacturing, and jobs across Upstate New York and to our national security and U.S. leadership in this critical industry. I am making it a top priority for the Senate to swiftly act to pass emergency spending to implement these critical bipartisan semiconductor incentives.”
“For years, a global chip shortage has impacted U.S. manufacturing, slowed shipments of consumer electronics, forced our country to rely on foreign manufacturers, and called into question the security and integrity of American supply chains. The CHIPS provisions that became law last year are essential steps to reestablish the United States as a leader in semiconductor technology and strengthen our economy,” said Senator Gillibrand. “While I’m urging the Biden administration to prioritize funding for these important policies, more must be done. I will keep working with my colleagues in Congress to bolster investment in our domestic chip industry and address the vulnerabilities in domestic manufacturing and critical supply chains.”
“Bold new investments in U.S. semiconductor manufacturing are also investments in creating good-paying jobs, in our economic strength and national security, and in American leadership and competitiveness abroad,” Congressman Tonko said. “Our bipartisan CHIPS for America Act takes needed action that will help shore up America’s semiconductor supply chains and propel our global competitiveness in this vital industry and many others that depend on it. I’m proud to stand with my New York colleagues in pushing this legislation forward and urge all of our nation’s leaders to join us, implement its provisions and help propel a new, brighter future of American manufacturing.”
“I’m glad to join Senators Gillibrand and Schumer in an effort urging President Biden to fully fund initiatives outlined in the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, a bipartisan measure that was included in the FY2021 National Defense Authorization Act (NDAA) and passed with my support. In Central New York, companies like SRC, SAAB, and Lockheed Martin rely on semiconductors to develop technology used by the military and in national security missions. What’s more, the local production of semiconductors has the potential to continue growing our regional economy and provide highly skilled, good-paying jobs. The CHIPS Act aims to advance domestic semiconductor research and production to reduce our reliance on foreign-produced semiconductors, secure our supply chain, grow the economy, and create more local jobs. To achieve these goals, we must commit to fully funding programs authorized under the CHIPS Act,” said Rep. Katko.
Semiconductors enable nearly all industrial activities, including systems that undergird U.S. technological competitiveness and national security. Semiconductor design and manufacturing is a global enterprise with materials, design, fabrication, assembly, testing, and packaging operating across national borders. In the modern age, U.S. strength in semiconductor technology and fabrication is vital to U.S. economic and national security interests.
However, the number of U.S firms involved in semiconductors and related device manufacturing has dropped and the U.S only accounts for approximately 12% of global semiconductor production capacity. This reduction in the number of firms is largely a result of industry consolidation and a lack of federal investment to ensure American competitiveness in the industry. Additionally, American companies continue to outsource manufacturing while foreign governments have aggressively subsidized production.
The provisions passed in FY21 NDAA will increase federal support for semiconductor manufacturing by providing new federal incentives to conduct advanced research and development of semiconductor technology, secure the supply chain, and strengthen national and economic security by reducing reliance on foreign semiconductor manufacturing.
Full funding and implementation of the provisions based off of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act would help reinvigorate the economy by creating high-paying jobs, developing talent pipelines for American workers, and increasing technological innovation. The CHIPS provisions would deliver essential funding for manufacturing, advanced research and development and job-training programs for semiconductor technology, and it would expand employment opportunities for disadvantaged workers. If enacted, the CHIPS provisions could support thousands of American jobs and have wide ranging benefits throughout the economy for countless industries, communities and working families.
Schumer and Gillibrand have long-championed increased efforts to expand the domestic semiconductor and broader microelectronics industries, by sponsoring legislation like the bipartisan American Foundries Act, which they negotiated, in combination with pieces of the CHIPS Act, as an amendment to the FY2021 NDAA. The amendment included Schumer’s provision to bolster U.S. leadership in the semiconductor and broader microelectronics industries through federal programs, which must now be funded. Last month, Senator Gillibrand led a bipartisan call on the Biden administration to implement these provisions. Schumer has since announced that in the coming weeks, he will be bringing his bipartisan Endless Frontier Act to the Senate floor for consideration as part of a broader competitiveness package that will include emergency spending to implement the NDAA semiconductor provisions.
Full text of the letter can be found here and below.
Dear President Biden,
We write today to encourage you to prioritize securing funding to implement the initiatives authorized in the CHIPS for America Act that were enacted into law as part of the fiscal year 2021 National Defense Authorization Act (referred to as the ‘CHIPS provisions’). We would specifically request you consider joining us in support of funding levels that are at least the authorized amounts proposed in the original bill as you work with Congress on a package of policies to better compete with China and how best to strengthen our country’s economic competitiveness and resiliency as well as national security.
While signing your Executive Order on America’s Supply Chains on February 24, 2021, we were pleased to hear your comments: “bipartisan work has already been done…We need to make sure these supply chains are secure and reliable. I’m directing senior officials in my administration to work with industrial leaders to identify solutions to this semiconductor shortfall and work very hard with the House and Senate.” We agree that the United States must build on the bipartisan Congressional efforts to authorize the CHIPS provisions and now swiftly move to fund these programs so they can be implemented and begin to address the current supply-chain vulnerabilities that threaten our national and economic security and ensure our nation’s continued global leadership in this critical technology. We are especially encouraged by the opportunity to do emergency mandatory funding for implementation of CHIPS as part of a competitiveness package the Senate is currently compiling, and would welcome your support in that effort.
The United States cannot wait to provide these resources over the years ahead. The halted production lines for consumer technology, auto manufacturers, truckers, and other critical industries due to a semiconductor shortage further highlights the pressing need to act quickly and fund the enacted bipartisan provisions.
In your Build Back Better initiative, you recognized the value of restoring critical supply chains to U.S. soil to help revitalize our domestic manufacturing capacity and create good-paying jobs. Full funding and implementation of CHIPS would reinvigorate our economy by creating high-paying jobs, developing talent pipelines for American workers, and increasing technological innovation. The CHIPS provisions authorize funding for manufacturing, R&D and job-training programs, with a focus on creating pathways for Americans to acquire the skills necessary for these jobs, including expanding employment opportunities for disadvantaged workers. Ensuring these provisions are fully funded would support thousands of American jobs and create a ripple effect throughout the economy, benefiting countless industries, communities and working families.
In addition to enabling sustainable economic growth today, funding the CHIPS provisions is a top national security priority. The Chinese Communist Party (CCP) has aggressive plans to reorient and dominate the semiconductor supply chain, pouring over $150 billion in semiconductor manufacturing subsidies and investing $1.4 trillion in their efforts to become the dominate global technological power. Even full funding of the originally filed CHIPS provisions pales in comparison to the investments being made by the CCP, which speaks to why consideration of an even higher level of funding is worthwhile.
The United States must also work with our allies and strategic partners to out-scale the CCP in manufacturing capabilities for advanced semiconductors. If we lose these highly-skilled jobs and know-how to China, the United States will never recapture them. Further, we risk dependence on a strategic competitor for the advanced semiconductors that power our economy, military, and critical infrastructure.
As you develop your FY 2022 budget request, we encourage you to include some initial investments to support semiconductor R&D and manufacturing at agencies like Commerce, DOD, DOE, and NSF as intended by CHIPS.
Finally, should you explore executive actions to address this urgent semiconductor matter, we encourage you to continue pursuing a technology neutral approach.
We are committed to meeting the national imperative of securing our critical supply chains and look forward to working with you and your Administration to achieve this vital objective.
Sincerely,