Company Executives Lobby during the 2008 Washington Forum

Company Executives Lobby during the 2008 Washington Forum

On April 15-16, SEMI hosted the 2008 Washington Forum. Over 20 industry executives travelled to Washington to participate in more than 30 meetings with Congress, the Administration, and staff of the presidential candidates. During the meetings, SEMI promoted the public policy goals that affect our industry and elevated the industry’s profile in Washington. The priority issues included innovation, solar energy, export control, and intellectual property protection.

Congressional meetings consisted of Senators and Representatives from states with a significant industry presence, such as California, New York, Oregon and Texas.

A highlight of the Forum was a Roundtable Discussion with the House High-Tech Caucus cosponsored by Reps. Kirsten Gillibrand (D-NY) and Michael McCaul (R-TX). Zoe Lofgren (D-CA), Mike Honda (D-CA), and Bill Sali (R-ID) attended the Roundtable Discussion, as well as staff to other Members of Congress.

Presidential Candidates and Innovation

One of the goals of the 2008 Washington Forum was to position our industry for the new Administration that will begin in January 2009. SEMI member company executives discussed innovation issues with a technology aide to Sen. Clinton (D-NY) and a campaign representative for Sen. Obama (D-IL). The meeting with an aide to Sen. McCain (R-AZ) had to be postponed but will take place in the coming weeks. Here are some highlights of their technology platforms:

  • Senator Clinton: Establish a $50 billion strategic energy fund to finance energy research and foster alternative energy use; increase basic research budgets by 50% over 10 years for NSF, DOE, and DoD (DARPA); triple NSF fellowships and increase awards; support minority education in math and sciences; make 20% R&D credit permanent; and restore “integrity” to science policy
  • Senator Obama: Reform the patent system and give patent office additional resources to improve patent quality; support free and “fair trade” and US businesses abroad including IP rights; make current R&D tax credit permanent; improve our H1- B visa program to attract best and brightest and work to improve U.S. education in science and math; and double federal investment in basic research and “embrace science and technology investment.”
  • Senator McCain: Establish permanent tax credit = 10% of wages spent on R&D; ban internet and cell phone taxes; lower barriers to trade; develop a national strategy for energy security (no details); and cut corporate tax rate (to 25% from 35%) and allow first year deduction of equipment.

SEMI Innovation Issues

Many of the meetings at this year’s Washington Forum focused on innovation. Innovation encompasses several different policy issues that are critical to our industry:

  • Federal R&D Investments: SEMI urges appropriators to fund critical R&D agencies at levels at least in line with the President’s budget request based on the American Competitiveness Initiative. For FY09, we are asking for $6.9 billion for NSF and $447 million for NIST labs. SEMI urges Congress to fund the $20 million government portion for the Focus Center Research Program.
  • Tax Credits: SEMI urges Congress to extend the investment tax credit (ITC) for commercial solar investment as soon as possible before it expires at the end of 2008. In addition, we urge Congress to extend the R&D tax credit, include retroactive application to when it expired at the end of 2007, strengthen the credit, and make it permanent.
  • Highly Skilled Immigration Reform: SEMI urges Congress to pass highly skilled immigration reform this year, including an H-1B visa cap increase.

Solar Energy in Washington

With an estimated 20 percent of SEMI member companies are active in photovoltaics, SEMI has formed the PV Group (www.pvgroup.org), a special interest group dedicated to serving the PV manufacturing supply chain.

During the Washington Forum, SEMI dedicated one lobby team to meet with Members of Congress and discuss our primary public policy goal in this area—to extend the commercial investment tax credit (ITC) for solar energy that is scheduled to expire at the end of the year. Specifics on these efforts include:

  • Tax Incentives are Key: The team stressed that continued tax incentives for solar energy would strengthen an important high-tech industry that provides a critical alternative energy and promote its use in the United States. The ITC would create new jobs in the U.S. and spur economic growth.
  • Big Hurdle is Cost Offset: The big hurdle for extending the alternative energy tax credits is offsetting the cost. The House of Representatives recently passed a bill that offsets the costs for the ITC by decreasing tax breaks for oil and gas companies. The Senate passed an extension for the alternative energy credits by including them as an amendment to an economic stimulus measure that addresses the current housing issue but did not include offsets. There is disagreement in Washington regarding how to cover the ITC costs and it will be difficult for this bill to become law until this is resolved.

Dynamic Export Control Discussions Continue

The Washington Forum included meetings with officials from the Commerce Department and the National Security Council to discuss export control reform. Here are highlights:

  • Presidential Directives: President Bush issued two directives in January 2008 calling for reform of the dual-use and munitions export control systems. The key elements of the dual-use directive are to: increase the focus on foreign end-users as opposed to countries (through the validated end-user and other programs); assess the controls in terms of U.S. competitiveness (including a regular and systematic review of the control list and revisions to intra-company transfer policy); and enhance transparency. While these goals are in line with the export control reforms that our industry is working to achieve, the directives do not require specific action or create obligations on the part of the government. The implementation of the reforms is the key.
  • Validated End-User Program (VEU): A breakthrough came in 2007 with the creation of the VEU program which allows U.S. companies to ship eligible products to VEU companies without an individual validated license. Five companies have been approved for VEU status so far. This program is in an early phase and the U.S. and Chinese governments are discussing issues and implementation.
  • Commerce Control List Review: The Commerce Department is reviewing the Commerce Control List (CCL) that outlines which items require an export license. SEMI believes that a comprehensive review of the controls for semiconductor equipment and materials is long overdue and we will continue to push for this in the coming months.
  • Intra-Company Transfers: The Commerce Department is preparing a proposed rule that would create a new license exception for intra-company transfers. This rule would eliminate some license requirements and would make it easier to conduct R&D on a global basis within a company.

Intellectual Property White Paper Released

SEMI just released an Intellectual Property White Paper, which estimates losses of up to $4 billion annually for the semiconductor equipment and materials suppliers due to IP infringement. During the Washington Forum we presented the paper to officials from the office of the U.S. Trade Representative and the U.S. Chamber of Commerce. For more information, go to http://www.semi.org/ipwhitepaper.

Chris Padilla Receives the SEMI Government Leadership Award


During the 2008 SEMI Washington Forum, SEMI awarded Chris Padilla, Under Secretary of Commerce for International Trade, with this year’s SEMI North America Government Leadership Award. SEMI commends Under Secretary Padilla for his track record in promoting trade and looks forward to working with him in the future.

The North America Advisory Board created this award five years ago to recognize policymakers who demonstrate outstanding leadership on policies that advance the competitiveness of the U.S. semiconductor equipment and materials industry.

SEMI invites our member companies to come to Washington throughout the year. We will continue to work with key congressional offices and regulatory agencies to advance the public policy priorities of the industry.

For more information on the Washington Forum, please contact Ken Schramko, Manager of SEMI North America Public Policy, at kschramko@semi.org.