Several of the world’s largest tech companies including Apple, Microsoft, Amazon, and Google have teamed up with chipmakers such as Intel to announce the formation of a new lobbying group to pressure the U.S. government for chip manufacturing subsidies.
The lobbying group – dubbed the Semiconductor in America Coalition (SIAC) – have called on congressional leaders to appropriate $50 billion for domestic chip manufacturing incentives and research initiatives.
“Semiconductors are the brains of the systems and technologies that enable America’s economic growth, national security, digital infrastructure, and global technology leadership,” said John Neuffer, president, and CEO of the Semiconductor Industry Association (SIA), whose members joined with other companies in the semiconductor ecosystem and leaders in downstream sectors to form SIAC.
The coalition noted that its mission is to advance federal policies that promote semiconductor manufacturing and research in the U.S. to strengthen America’s economy, national security, and critical infrastructure.
“Leaders from a broad range of critical sectors of the U.S. economy, as well as a large and bipartisan group of policymakers in Washington, recognize the essential role of semiconductors in America’s current and future strength. The Semiconductors in America Coalition looks forward to working with Congress and the Biden Administration to enact needed federal investments in domestic semiconductor manufacturing and research, as called for in the CHIPS for America Act, so more of the chips our country needs are produced on U.S. shores,” Neuffer highlighted in a joint statement.
SIAC members include Amazon Web Services, Apple, AT&T, Cisco Systems, General Electric, Google, Hewlett Packard Enterprise (HPE), Microsoft, and Verizon.
In its letter to congressional leaders, SIAC members stated the current global chip shortage has highlighted the need to ensure a stronger and more resilient domestic semiconductor supply chain over the long term.
“The current shortage of semiconductors is impacting a broad range of industries throughout the economy. To address this problem in the short term, government should refrain from intervening as industry works to correct the current supply-demand imbalance causing the semiconductor shortages. But for the longer term, robust funding of the CHIPS Act would help America build the additional capacity necessary to have more resilient supply chains to ensure critical technologies will be there when we need them,” the letter said.
According to the coalition, the share of global semiconductor manufacturing capacity in the U.S. has decreased from 37 percent in 1990 to 12 percent today. This decline is largely due to substantial subsidies offered by the governments of our global competitors, placing the U.S. at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities, or “fabs.”
“Additionally, federal investment in semiconductor research has been flat as a share of GDP, while other governments have invested substantially in research initiatives to strengthen their own semiconductor capabilities,” the letter added.
Last month, SIA and the Boston Consulting Group released a report examining the global semiconductor supply chain and outlining government actions needed to strengthen it, including enacting federal investments in semiconductor manufacturing and research.
But tech companies aren’t the only ones who’ve felt the sting of chip shortages, with auto giant Ford Motor Co. previously stating that it could halve Q2 production.
In parallel, Apple is facing the same conundrum but with less severity.
The iPhone maker said earlier last month that it will lose $3 billion to $4 billion in sales in the current quarter ending in June due to the semiconductor shortages; however, that number is considered to be low in comparison to its $72.9 billion in sales.