Intel, AMD, and Nvidia are calling on the Biden administration to boost federal funding to shore up chip manufacturing and research in the US, citing the risk of falling behind Asia.
The companies made the call through a trade group, the Semiconductor Industry Association. On Thursday, the association sent a letter to President Biden urging him to “include robust funding” for the domestic chip industry amid government efforts to stimulate the US economy.
“Semiconductors are critical to the US economy, American technology leadership, and our national security,” reads the letter, which was also signed by Qualcomm, IBM, Western Digital, and several other US technology providers.
More funding to US chip companies also promises to fuel economic growth, create local jobs, and secure the country’s supply chain from depending on foreign factories, the document adds.
The letter arrives on the heels of Congress passing the 2021 National Defense Authorization Act. Tucked away in the text is mention of a federal incentive program meant to spur domestic companies to manufacture and research semiconductor technology in the US. The program could funnel billions in federal investment to Intel, which maintains several chip factories in the country. However, the company’s recent struggles to improve its manufacturing processes has prompted Intel to mull whether it should outsource chip production to Asia.
The US’s incentive program is also open to “fabless” semiconductor companies, such as AMD and Nvidia, which do chip research in the US, but outsource the manufacturing to Taiwan’s TSMC and Korea’s Samsung.
It’ll be up to the US Commerce Secretary under the Biden administration to determine what projects will be eligible for the incentive program. However, the text notes large federal investments at more than $3 billion will need the approval from President Biden.
According to the Semiconductor Industry Association, the US urgently needs to boost the federal funding to the domestic chip industry, or risk losing its technology edge.
“Indeed, our share of global semiconductor manufacturing has steadily declined from 37% in 1990 to 12% today,” the letter reads. “This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the US does not. Others have also increased R&D investment substantially, while the US investment in research has been relatively flat.”
The letter goes on to ask the Biden administration to provide other incentives to the US semiconductor industry in the form of tax cuts and grants. “We believe bold action is needed to address the challenges we face. The costs of inaction are high,” the document adds.
In the meantime, both TSMC and Samsung have plans to boost their own manufacturing with billions in additional investment. The projects also include constructing new foundries in the US.