US Semiconductor Makers Need Help


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Dale Crafts is a small business owner, former Maine state representative and former candidate for the United States Congress.

Scroll through the headlines and the economic news is not promising. Recession fears fueled by negative real GDP growth continue to be a concern. The annual inflation rate accelerated in May to a level not seen since December 1981, as the Federal Reserve responded with rate hikes and promises of more to come.

Additionally, goods purchased despite the higher prices are arriving slower than usual due to issues with the supply chain. All of these concerns create a collective urge in the public to cry out for someone to “do something”, but with such a division in our country, who will do it and what will it be? A good place to start is to increase our ability to manufacture products domestically.

America reached its peak of manufacturing employment in 1979, when it accounted for 22% of nonfarm employment in the country, according to the Bureau of Labor Statistics. Employment in the manufacturing sector had fallen to 9% in 2019, while the manufacturing sector as a percentage of GDP was 10.93%.

The semiconductor industry is acutely feeling the impact of declining domestic manufacturing and supply chain issues. Much like manufacturing figures in general, our country was a world leader in the development and production of semiconductor chips four decades ago.

As a former state representative, small business owner, and congressional candidate, I know firsthand how this affects our economic prosperity here in Maine and across the country. At present, we rely on foreign trade to supply our chips, with the majority being made in Taiwan, China, and South Korea. This reliance makes us vulnerable to supply chain issues, which lead to a backlog of many products that require chips, such as automobiles, but also leave us vulnerable to disruption caused by trade disagreements and hostile nations like China that don’t share not our interests.

Due to industry consolidation and governments in other countries prioritizing incentives to invest in their own chip manufacturing, US manufacturing capabilities represent a decreasing share of global capacity in its together. This is where Congress has an opportunity to do something. Congress has passed legislation that addresses our need to build domestic semiconductor manufacturing capacity. But they didn’t fund it.

Here’s what needs to happen to really make a difference: full funding for the CHIPS Act and an investment tax credit, as originally proposed in the law facilitating American-made semiconductors. CHIPS Act funding will help US factories with $52 billion to start building semiconductor fabs. An ITC will ensure U.S. chipmakers have a path to continued growth over the next decade.

Investing in chip manufacturing in America is a win-win situation for American workers. The US semiconductor industry supports more than 275,000 direct, well-paying jobs, and every semiconductor manufactured here at home supports nearly six jobs in other parts of our economy. That equates to 1.85 million employed Americans earning over $160 billion in income each year.

The Semiconductor Industry Alliance projects that CHIPS funding alone would support 185,000 temporary jobs and nearly $25 billion in the US economy. We have an opportunity in Maine to attract some of the investment and jobs created. These are great jobs in an important industry with annual salaries of up to $170,000.

This funding legislation enjoys broad support in both houses of Congress and among members of both political parties, an anachronism in our current climate. Today’s faltering economy has shown that we cannot continue to depend on foreign nations for the vital products that fuel our economy. The senses. Susan Collins and Angus King are expected to fight to pass legislation providing funding for the CHIPS Act and an investment tax credit.


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