Comments to the US Commerce Department on Incentives, Infrastructure, and R&D for a Strong Semiconductor Industry

America’s experience with the semiconductor industry, just as with any other advanced-technology industry, illustrates that leadership is never assured: Indeed, the United States has created and led, lost, and regained global leadership in semiconductor innovation and production, only to see it, in some dimensions, increasingly slip away again. To that end, ITIF applauds both the Biden administration and U.S. Congress for articulating and advancing the Creating Helpful Incentives to Produce Semiconductors (“CHIPS”) for America Act, which has been passed out of the Senate and House in largely similar form in their respective U.S. Innovation and Competition Act (USICA) and America COMEPTES Act. The legislation recognizes that concrete policy action is needed if America is to maintain its world-leading position in semiconductor chip design and restore a world-leading position in semiconductor manufacturing and logic chip innovation. The programs and incentives envisioned in the legislation will need to be deftly and expediently administered by a multitude of federal agencies, especially the Department of Commerce.

This submission provides input to the DoC RFI with regard to semiconductor research and development (R&D), incentives to stimulate domestic semiconductor manufacturing, talent pipelines, policies that can stimulate greater domestic demand for semiconductors, and enhancing semiconductor supply chain resilience. The submission draws heavily from several recent ITIF reports, including “An Allied Approach to Semiconductor Leadership” (July 2020), “Moore’s Law Under Attack: The Impact of China’s Policies on Global Semiconductor Innovation” (February 2021), and “Going, Going, Gone? To Stay Competitive in Biopharmaceuticals, America Must Learn From Its Semiconductor Mistakes” (November 2021).