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CEDIA’s government affairs efforts are designed to support members and ensure that their abilities to own and operate their businesses are not impeded.

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All CHIPS In on Technology

by Rachel Tindall | Aug 25, 2022

The CHIPS and Science Act of 2022 strengthens the U.S. position on technology

The bipartisan CHIPS and Science Act of 2022 is a historic step by the U.S. government to strengthen domestic semiconductor manufacturing capabilities and competitiveness, as well as support key technologies.

Semiconductors are critical to the U.S. economy, national security, technology leadership, and day-to-day life for American consumers. Semiconductors play a major role in nearly all the electronics you use every day. Chips are also the foundation for the next generation of tech innovation. According to the National Journal, the semiconductor manufacturing sector in 2021 was worth $595 billion. Chips enable the key technologies driving the future, and remain a staple in the home technology industry.

Congress recently passed the $260 billion CHIPS and Science Act to support domestic semiconductor manufacturing capabilities, with more than $50 billion to build new manufacturing facilities. The Act will encourage hundreds of billions more in private sector semiconductor investment across the county. It also allocates more than $50 billion to bring semiconductor chip manufacturing to the U.S. and as a result, help lower costs and prevent supply chain disruptions.

The legislation allocates funds on a variety of manufacturing incentives aimed at boosting American chip manufacturing, as well as investments in industry research & development (R&D) and workforce development. The CHIPS Act will help the U.S. maintain and advance in the scientific and technology sectors. This is great news for our members and industry as a whole.

Key Statistics

According to multiple reports, the United States accounts for 47% of the global chip industry. U.S. production of chips declined from 37% of global supply in 1990 to 12% in 2020.

In terms of percentage of Gross Domestic Product (GDP), U.S. federal R&D spending is near its lowest point in over 60 years (The CHIPS and Science Act Fact Sheet from House Leadership). Total U.S. R&D spending has fallen from fourth place in the 1990s to ninth place today. We’re behind advanced economies like Germany, Japan, and South Korea. To reverse these trends, the CHIPS Act authorizes the largest five-year dollar investment in public R&D in the nation’s history.

Regional Economic Growth

According to The Washington Post, the bill authorizes an additional $200 billion for programs to spur innovation, including a new National Science Foundation Directorate for Technology, Innovation and Partnerships, and $10 billion to seed 20 “regional tech hubs.”  The CHIPS and Science Act promotes regional innovation and technology hub access across the country, bringing together state and local governments, institutes of higher education, and businesses to create regional partnerships. The goal is to develop technology, innovation, and manufacturing sectors.

While there are many positives to the legislation, some structural issues need to be addressed, including:

  • Attracting STEM talent being able to come to the United States from abroad
  • Streamlining permitting processes for building semiconductor factories (fabs) on a reasonable timeline

The legislation is a strong first step. The National Journal explains that 2025 will be the earliest CHIPS Act-supported chips will be ready for use. It’ll be worth watching, especially for businesses in our industry, what other legislation follows The CHIPS Act of 2022 to support the semiconductor industry and advance technology innovation.

 

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CEDIA’s public policy efforts are designed to support CEDIA members and ensure that their abilities to own and operate their business are not impeded upon.

The Grassroots Legislative Network is a collection of CEDIA members across the U.S. that helps to monitor, gather, and share information about legislative and regulatory issues that pertain to the home technology industry. The Grassroots Legislative Network also develops and implements strategies for responding to legislative issues.

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For more information, including tips on contacting your legislators, contact Director of Government Affairs Darren Reaman at 317.328.4336 ext. 144.