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June 10, 2021

SEMI Commends Biden Administration’s Efforts to Strengthen Semiconductor Supply Chains

On June 8, the White House released its report derived from the reviews of critical products directed under the February 24 Executive Order 14017 to secure America’s supply chains. Among those critical products, the Department of Commerce conducted the review of semiconductor manufacturing and advanced packaging.

The report makes seven major sets of recommendations to expand and secure the U.S. semiconductor supply chain. These include promoting transparency, collaboration and partnership with industry to address the current semiconductor shortage; supporting small and medium-size semiconductor businesses, including disadvantaged businesses; and engaging with allies and partners on semiconductor supply chain resilience.

The report makes important recommendations for significant investments to strengthen and diversify the nation’s STEM pipeline. Workforce development and scarcity of skilled workers is a significant issue impacting the growth of the industry. It calls for targeted investments at historically black colleges and universities, tribal colleges and universities, and Hispanic-serving institutions. The report recommends that the Department of Labor’s Employment and Training Administration (ETA) provide grants for veterans, people of color, individuals with disabilities, and other underrepresented communities for high-skill employment. Also, ETA is to support the use of the Advanced Manufacturing Competency Model, which SEMI helped to create, along with other industry-related competency models. SEMI strongly agrees with recommendations to increase the number of high-skilled visas, eliminate the per-country cap on employment-based visas, and exempt skilled STEM talent from employment-based visa caps. Finally, the report recommends supporting apprenticeships and calls for Congress to invest in high-quality middle and high-school career and technical education programs to enable students to earn a college credit or an industry-recognized credential for in-demand sectors.

Export ControlsThe report includes recommendations that seek to ensure that export controls support the semiconductor manufacturing and advanced packaging supply chain and that the Committee on Foreign Investment in the United States (CFIUS) continues to review foreign investment transactions in the semiconductor manufacturing and advanced packaging supply chain. SEMI applauds the report’s recognition that “U.S. SME [semiconductor manufacturing equipment] producers are at risk of being significantly impacted by trade restrictions between the United States and China or unexpected demand shifts in Asia. The resulting impacts could last far beyond current revenue declines, as semiconductor manufacturers experience some degree of equipment lock-in, with changing equipment providers requiring costly redesigns.”

SEMI has consistently noted the significant, harmful impact unilateral U.S. trade restrictions have had on U.S. SME producers and looks forward to continuing dialogue with the U.S. government to ensure export control policy supports supply chain resilience and the competitiveness of U.S.-origin items.

Growing and strengthening the semiconductor manufacturing supply chain is a key component of the recommendations, including fully funding the CHIPS Act programs and strengthening the domestic semiconductor manufacturing ecosystem. These investments will make the U.S. more globally competitive in semiconductor manufacturing, promote semiconductor innovation, and benefit countless industries that rely on semiconductors in their own products. SEMI has supported the CHIPS Act since its introduction and we continue to actively support efforts to enact these important programs, along with an investment tax credit for semiconductor manufacturing and related investments.

Global AdvocacyImportantly, the report also states “Congress should authorize and fund incentives to support key upstream – including semiconductor manufacturing equipment, materials, and gases – and downstream industries throughout the supply chain.” SEMI applauds this recognition of upstream suppliers’ importance to supply chain resilience and the fundamental fact that more equipment and materials will be needed to supply more fabs in the United States. The report notes that “There is currently a shortage of 200 mm equipment, which shows no sign of abating.”

In addition, lead times for new equipment continue to grow. SEMI looks forward to working with the Biden Administration to ensure the Section 9902 Commerce incentive program and potential tax proposals are available for new and expanded facilities that produce semiconductor manufacturing equipment and materials, so that new fab investments in the U.S. are not impacted by potential upstream supply chain bottlenecks. 

We applaud the Biden Administration’s leadership to quickly enact policies that can bolster the semiconductor industry. We look forward to partnering with policymakers to advance the policies to ensure a strong, resilient and secure supply chain.

Joe Pasetti is vice president of Global Public Policy and Advocacy at SEMI.