ITIF Search

Comments to the National Institute of Standards and Technology Regarding Implementation of the CHIPS Incentives Program

The United States must get the CHIPS Incentives program right, because if it fails to do so, the United States is seriously at risk of losing long-term competitiveness in the semiconductor industry. One study predicted that, absent policy intervention, the U.S. share of global semiconductor fabrication would continue to shrink throughout the 2020s, to even below 10 percent. The United States should not let semiconductors get added to a long list to tech industries—including machine tools, telecommunications equipment, displays, solar panels, and many others—where the United States once held a leading global market share, only to see it slip away. Such erosion was bad enough in the past when our competitors were mostly democratic and allied nations. Further erosion would be frankly catastrophic and permanently debilitating given the accelerating competition from China.

It should also be noted that America’s current global market share in semiconductor manufacturing, 10-12 percent, is far below the share the U.S. holds in other strategic industries, including aerospace (where 49 percent of global manufacturing is performed in the United States), biopharmaceuticals and medical equipment (at least 25 percent), and petrochemicals (around 20 percent). In other words, the United States can do much better than the 10 to 12 percent of global semiconductor manufacturing it commands today. But if the United States misses this opportunity that Congress has provided, it will almost surely never get another one to restore U.S. semiconductor competitiveness and globally leading innovation and manufacturing prowess. It’s now or never time for the U.S. semiconductor industry. As such, Commerce should focus laser-like on one goal: providing generous-enough, cost-differential-reducing subsidies to significantly expand U.S. semiconductor market share across the board (e.g., memory and logic, digital and analog).

Read the filing.

Back to Top