Semiconductors or “chips” are the building blocks of the modern digital economy and a strategic asset for any country’s economic and national security. As markets vie to develop cutting-edge chip technology, U.S. policymakers must continue to prioritize the criticality of investing in domestic semiconductor leadership.
The landmark U.S. CHIPS and Science Act was a critical step in this generational effort. Since its enactment in 2022, over 50 new semiconductor ecosystem projects across 20 states totaling more than $200 billion in private investment and 40,000 new jobs have been created. These projects include building new fabs for manufacturing leading edge chips that power AI machine learning and everyday devices like laptops, cellphones, and household appliances. The law provides the necessary funding — including $39 billion direct support and up to 25% investment tax credits – for companies to build new or renovate existing chip manufacturing facilities in the U.S. through the CHIPS Incentives Program, which is an essential part of long-term semiconductor leadership.
To stay at the top of the global chips race, the U.S. must also invest heavily in research and development (R&D). The semiconductor industry annually invests about one-fifth of its revenue into R&D, with U.S. headquartered companies spending close to $60.2 billion on R&D in . To ensure R&D investment expands in the U.S., the federal government must use a range of available tools. The CHIPS and Science Act provides funding of up to $11 billion for four integrated entities, including the National Semiconductor Technology Center (NSTC), National Advanced Packaging Manufacturing Program (NAPMP), Manufacturing USA Institute and CHIPS Metrology to support chips R&D. The CHIPS R&D program is guided by the Industrial Advisory Committee (established via the FY 2021 NDAA), which comprises leaders from a broad range of disciplines including the semiconductor industry and academia to advice on the CHIPS R&D programs. The U.S. Commerce Department has also announced notice of funding opportunities (NOFOs) for the Manufacturing USA Institute, NAPMP materials R&D, and metrology research.
While this is important progress, more work needs to be done to achieve an ambitious R&D program that keeps the U.S. in the lead. We urge U.S. policymakers to develop a national semiconductor R&D strategy that supports commercial R&D priorities and strengthens U.S technological competitiveness. In addition, while the Biden Administration has allocated more than $5 billion for the NSTC consortium in February 2024, the administration should take steps to announce NOFOs for research and establish a headquarters for the NSTC – along with affiliated technical centers. Further, the administration should work with all stakeholders to support commercial R&D that will drive advancements in AI, quantum computing and advanced communications. This includes supporting key investments for the construction of commercial R&D facilities, in addition to the funding of the NSTC.
The U.S. Congress must also stay involved. For current and future funding cycles, lawmakers must provide sufficient funding for critical R&D and science programs for key technology focus areas, notably artificial intelligence, authorized under Division B of the CHIPS and Science Act – such programs include NIST’s Scientific and Technical Research Programs, the NSF’s Directorate of Technology, Innovation and Partnerships, and the Energy Department’s Office of Science.
The administration is doing an admirable job implementing the CHIPS programs. The U.S. Congress will continue to play an important role in overseeing the effective obligation of grant funds appropriated under Division A of the CHIPS and Science Act. We look forward to continuing our partnership with U.S. policymakers to advance the development of semiconductor technologies and enhance U.S. competitiveness.