Semiconductor Industry Association asks for $37 billion in government subsidies

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SIA lobbies for government funding.
Image: SIA

The Semiconductor Industry Association (SIA) is preparing to lobby the U.S. government for $37 billion in microelectronics subsidies, reports the Wall Street Journal. The organization’s proposal calls for the building of a new chip foundry, increased research funding, and state-level financial aid.

The trade group’s bid follows the White House’s recently declared intention to make the United States a more competitive player in the global microelectronics field.

SIA Subsidy Proposal Breakdown

According to the Wall Street Journal, the group’s proposal includes the building of a $5 billion cutting-edge chip production facility. The organization suggests that a private corporation should team with the government to fund and operate the plant. The group also wants $15 billion for block grants to help states incentivize the construction of new microelectronics plants.

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The SIA will also ask Washington to spend $5 billion on a new technology center and an additional $12 billion to fund its fundamental and applied research work.

The trade group suggests a combination of coronavirus relief funds, the National Defense Authorization Act, and new tech-related legislation be used to sponsor its proposal. While the organization’s plan is expensive, it argues the initiative is essential to America’s future.

“Our plan has a big number, but the cost of inaction would be far bigger to our economy, our national security, and our leadership in critical technologies of the future,” noted SIA President John Neuffer.

American Officials Back Semiconductor Subsidies

Although the SIA’s plans are ambitious, the thrust of its proposal has broad support among government officials. Secretary of Commerce Wilbur Ross noted the White House would ensure “the United States has a secure, vibrant, and internationally competitive high-tech ecosystem, supported by domestic chip production.” Similarly, a State Department spokesperson said the agency is teaming with Congress and the private sector to keep the U.S. at the forefront of the semiconductor field.

Members of the U.S. Senate are working on ways to provide government funding for the American microelectronics industry.

The Wall Street Journal notes Senators Chuck Schumer (D-NY) and Todd Young (R-IN) called for $110 billion in tech sector spending that allocates money for semiconductor development. Besides, Sen. Tom Cotton (R-AK) is authoring a bill that features provisions echoing the SIA’s proposal.

Also, Sen. John Cornyn (R-TX) and Representative Michael McCall (R-TX) are working on a bill that includes investment tax credits for semiconductor fabrication equipment.

Earlier this month, the Taiwanese Semiconductor Manufacturing Company (TSMC) announced plans to build a new foundry in Arizona. Though the firm will spend $12 billion constructing the facility, it will also receive several state and federal subsidies. Since that chipmaker succeeded in securing significant government funding, the SIA’s popular recommendations will likely lead to further U.S. based microelectronics foundries launching soon.

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