SEMI Testifies at House Manufacturing Caucus

SEMI Testifies at House Manufacturing Caucus

By Jamie Girard, sr. director, Americas Public Policy, SEMI

SEMI was invited to testify at the U.S. House of Representatives’ Manufacturing Caucus and provided remarks at a briefing held on October 29, 2013 to examine manufacturing innovation in the United States.

The House Manufacturing Caucus, co-chaired by Reps. Tom Reed (R-NY) and Tim Ryan (D-OH) is an active, bipartisan Congressional group focused on enhancing the productivity, capacity, and competitiveness of American manufacturing.

PanelThe recent briefing was focused on reviewing the first national manufacturing innovation institute, the three current Requests for Proposals (RFP's) for future institutes, industry perspective on the outlook for the National Network for Manufacturing Innovation (NNMI) and the pending legislation to authorize future centers.

Congressman Reed and Congressman Joe Kennedy (D-MA) recently introduced H.R. 2996, the Revitalize American Manufacturing and Innovation Act of 2013 (RAMI). The bipartisan bill employs public-private partnerships, combining industry and academia to create a network of regional institutes across the country to coordinate education and training efforts. Under the bill, institutes will be selected for participation through a competitive, merit review process. 

A companion bill, S. 1468, has been introduced in the Senate by Senators Roy Blunt (R-MO) and Sherrod Brown (D-OH).

Representative Reed opened the briefing to discuss the RAMI, appeal for broad support from fellow legislators, and hear feedback from government agencies and industry representatives.  Reed said that the RAMI act will establish a Network for Manufacturing Innovation to improve U.S. manufactuing competitivenss and increase domestic production. 

The bill promises to build public/private partnerships through Centers for Manufactring Innovation among higher education, community colleges as well as small and large manufacturers to promote best practices, address advanced manufactuing challenges and comprehensively addressed education and workforce challenges.

Briefing panel members included Phillip Singerman, associate director for Innovation and Industry Services at the National Institute of Standards and Technology (NIST); David Danielson, assistant secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy; Aaron L. Martin, Ph.D., strategic planner, Analysis Center, Northrop Grumman Corporation; and SEMI global vice president for Advocacy, Jonathan Davis.

Aaron Martin described the collaborative advantages offers by the nation's prototype innovation institute which was recently established in Youngstown, Ohio to advance additive manufacturing technology.

Additive manufacturing, also known as 3D printing, is a group of new technologies that build up objects, usually by laying down many thin layers on top of each other. In contrast, traditional machining creates objects by cutting material away. A diverse array of manufacturing industries — from aircraft to medical devices and from electronics to customized consumer goods — are already using or exploring applications of these new technologies.

DOEDOE Assistant Secretary David Danielson spoke to the key characteristics of innovation and how shared platforms for advanced research and development have deteriorated in the US.  He referred to the erosion of the dense interrelated ecosystem of R&D as the loss of the "industrial commons."

Danielson said that, “We released competitions for three more topics, one of which the DOE is sponsoring in the area of next-generation wideband gap power electronics manufacturing, which is an area that touches all different clean energy technology areas.”

Jonathan Davis said that the total worldwide market for semiconductor manufacturing equipment is expected to reach $38 billion dollars next year. Virtually all of it comes from SEMI member companies. US based SEMI companies produce about $18 billion of that equipment and export about 78 percent of their product.

Davis said that SEMI members face extraordinary business challenges including constant and expensive research and development. On average the industry reinvests 10-15 percent of revenues into R&D.  Furthermore, because semiconductor manufacturing is an essential strategic industry, regions around the world are providing compelling incentives to support local industry growth including strong inducements for U.S. companies to locate operations overseas. Often, for both financial and customer appeasement reasons, the pressure to relocate some operations to other regions is formidable.

In addition to the substantial R&D investment challenges and competitive programs from foreign governments, industry faces an ever-present need for highly skilled technology workers to sustain operations at home.  With these many challenges, SEMI believes that the industry will be encouraged by the bi-partisan public/private partnership program outlined in the Revitalize American Manufacturing Innovation Act.  

Davis said, “This legislation represents the needed commitment and leadership by the United States government to strengthen and grow strategically important manufacturing industries.”

Due to its high-skilled/high-paying jobs and $13.5 billion in exports, SEMI members’ U.S. footprint is a good example of a strategic U.S. manufacturing industry.

The bi-partisan legislation provides a public private partnership model that has the potential to strengthen the vertical supply chain of numerous strategic manufacturing industries.

KennedyThe legislation won’t assist one particular company or university. Rather it is designed to support a specific sector supply chains made up of many small and medium size manufacturing companies to work, develop, commercialize and manufacture advanced products.

The legislation is also technology neutral. The government will not predetermine specific technology mandates. Rather, industries representing many different sectors can bring forth concepts to commercialize technology into manufactured products.  Industry will compete.  The most compelling technologies and the best business plans will surface.

The legislation calls for the creation of Centers for Manufacturing Innovation — or CMIs. Each CMI will focus on a specific technology that commercializes technology into manufactured goods. The Center will be located at a not-for-profit or university — meaning the center will serve as neutral ground for companies to co-develop technology at a precompetitive level or to work directly with suppliers and customers to jointly commercialize manufactured products.

What makes the CMI model attractive to industry is the legislation doesn’t dictate the model that industry must use at a CMI. It allows industry and academia to bring forth what they see as the best model for the CMI to be successful. 

The legislation also states that the Bayh-Dole Act shall not apply if federal financial assistance is awarded for the purpose of establishing a CMI.

Davis commented, “This is an important aspect of the legislation. It allows each CMI flexibility to develop an industry specific IP model. This is a welcomed development as it can be very difficult to develop a Bayh-Dole IP protocol consortium that involves many different companies with the host university or not for profit.”

The legislation also calls for two crucial components to assist the Network for Manufacturing Innovation Program Office at NIST to review and select wining public private partnerships. Matching Funds are required and the CMIs must be self-sustaining without further ederal funding after 7 years.

Davis concluded his remarks at the Manufacturing Caucus saying, “High tech sectors in the U.S. — like the one in which SEMI members participate — are under extraordinary pressure because of enormous R&D requirements as well as attractive foreign incentives and inducement to relocate.  We believe that establishing Centers for Manufacturing Innovation and the concepts embodied in the RAMI legislation is an appropriate private/public approach that meets many of the needs of our industry while giving the taxpayer the best potential return on their investment.”

For more information on SEMI and Public Policy, visit www.semi.org/en/Issues/PublicPolicy. For information about U.S. public policy, visit  www.semi.org/en/issues/publicpolicy/ctr_026004 or contact Jamie Girard (jgirard@semi.org).

 

November 5, 2013