U.S. Semiconductor Industry Association Welcomes Legislation to Strengthen Domestic Chip Production

The Semiconductor Industry Association (SIA) welcomes the introduction of the Building Advanced Semiconductors Investment Credit (BASIC) Act, which increases the Advanced Manufacturing Investment Credit rate from 25% to 35% and extends its duration for four years. SIA President and CEO John Neuffer says the legislation is crucial to the U.S.' competitiveness and sustained technology leadership, as it spurs continued investment in domestic chip production and innovation. The bill aims to strengthen the U.S. semiconductor manufacturing ecosystem and support the growth of the industry.

The Semiconductor Industry Association (SIA) has welcomed the introduction of the Building Advanced Semiconductors Investment Credit (BASIC) Act, which aims to bolster the U.S. semiconductor industry. The legislation increases the Advanced Manufacturing Investment Credit rate from 25% to 35% and extends its duration for four years. SIA President and CEO John Neuffer underscores the importance of this bill, stating that it is crucial for the U.S.'s competitiveness and sustained technology leadership [1].

The BASIC Act is designed to stimulate continued investment in domestic chip production and innovation. By enhancing the Advanced Manufacturing Investment Credit, the bill seeks to strengthen the U.S. semiconductor manufacturing ecosystem and support the industry's growth. This is particularly relevant given the current dynamics in the semiconductor sector, where AI-driven growth has led to a significant concentration of economic value among a small number of top players [2].

The semiconductor industry has experienced remarkable economic profit growth over the past two decades, with the aggregate economic profit rising from $38 billion in 2000-09 to $450 billion in 2010-19. However, this growth has been unevenly distributed, with the top 5 percent of companies generating the lion's share of economic profit, while the remaining 95 percent have seen their economic value generation decline sharply [2].

The BASIC Act is poised to address these imbalances by encouraging broader investment across the industry. By providing a more attractive financial incentive for semiconductor manufacturers, the act aims to foster a more balanced distribution of economic value. This could potentially lead to a more resilient and sustainable semiconductor ecosystem, benefiting not just the top players but also the broader industry [2].

The introduction of the BASIC Act comes at a time when the semiconductor industry is navigating significant challenges, including the impact of AI on industry dynamics and the expansion of the Chinese semiconductor market. The act's focus on strengthening domestic manufacturing and innovation is therefore timely and aligned with the broader strategic goals of the industry [2].

In conclusion, the Building Advanced Semiconductors Investment Credit (BASIC) Act represents a significant step forward for the U.S. semiconductor industry. By enhancing the Advanced Manufacturing Investment Credit, the act seeks to stimulate broader investment and innovation, fostering a more balanced and resilient industry ecosystem. The SIA's support for the bill underscores its potential to strengthen the U.S.'s competitiveness and sustained technology leadership in the global semiconductor market.

References:
[1] https://www.mckinsey.com/industries/semiconductors/our-insights/silicon-squeeze-ais-impact-on-the-semiconductor-industry
[2] https://www.semiconductors.org