US Chip Industry Urges Biden to Support Domestic Production

The chief executive officers of chip companies including Intel Corp., Qualcomm Inc., and Advanced Micro Devices Inc. urged U.S. President Joe Biden to support domestic production and stop the country from losing its edge in innovation.

The Semiconductor Industry Association sent a letter Thursday to Biden to include “substantial funding for incentives for semiconductor manufacturing, in the form of grants and/or tax credits” in his administration’s stimulus package.

The letter, signed by Bob Swan of Intel, Steve Mollenkopf of Qualcomm, Lisa Su of AMD, and other members of the SIA board, highlighted that the country’s share of chip manufacturing has dropped to 12% from 37% in 1990.“Our technology leadership is at risk in the race for preeminence in the technologies of the future, including artificial intelligence, 5G/6G, and quantum computing,” the letter said.

U.S. companies mostly outsource production to Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. That’s becoming a national security issue as tensions rise between the U.S. and China, which is investing heavily to expand its own chip industry.

The SIA argues that government incentives in other countries have unfairly disadvantaged U.S. chip manufacturing. The U.S. has historically shied away from tax breaks and other major government support for the industry, but some politicians have become concerned about the loss of these technical skills. Support by the Biden administration may even help TSMC and Samsung to go ahead with plans to build plants nearer their customers in the U.S. TSMC has announced an initial agreement to locate a new chip facility in Arizona. Samsung is considering various sites in the U.S., Bloomberg has reported.

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