Semiconductor Industry Association wants to lobby government for $37B

The U.S. Semiconductor Industry Association is in the early stages of launching a lobbying campaign to obtain $37 billion from the federal government, The Wall Street Journal reported.

Remain competitive against China

The semiconductor trade group wants to emphasize it needs access to capital to remain competitive in the global stage, WSJ wrote after obtaining a draft of the proposal. China and others are known for heavily subsidizing their domestic chip companies that put U.S. companies at a disadvantage.

The trade group is looking for funding to build new chip factories, help attract semiconductor investment, and increase research funding.

The timing of the lobbying may align with the Trump administration’s goals of reducing dependency on Asia for technology products and winning a technology arms race against China.

Funding would be made available to foreign and domestic companies looking to build facilities in the U.S. 

Allies in Washington

Any final agreement with the government will require modifications to the original proposal but it appears the SIA has friends and allies in the White House. U.S. Secretary of Commerce Wilbur Ross and Secretary of State Mike Pompeo appear to be supportive of the SIA’s goals.

State Department spokeswoman Morgan Ortagus told WSJ in a statement it is “working closely with Congress and the industry to ensure that the future of the semiconductor industry remains in the United States.”

The SIA also has friends on the other side of the political aisle. Most notably, Senate Minority Leader Chuck Schumer (D - NY) co-proposed a $110 billion lift in technology spending to include semiconductor research. 

Race against time

There is broader concern the U.S. is falling behind China in technology that will define the future, according to WSJ. Computer chips will be used across 5G networking and artificial intelligence -- two areas where the Trump administration wants to be a global leader in.

SIA estimates point to China doubling its market share of global chip production capacity by 28% at the end of the decade. By comparison, only 12% of chips are produced in the U.S. today, followed by Asia, Israel, and Ireland.

SIA President and CEO John Neuffer told WSJ that the organization is chasing a “big number” in funding, the cost of doing nothing “would be far bigger” to not only the economy but also to national security. The impacts will be felt elsewhere, he also said, including the U.S. leadership role in developing “critical technologies of the future.”