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Cotton Bill to Support Semiconductor Manufacturing in U.S.

June 26, 2020
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FOR IMMEDIATE RELEASE

Contact: Caroline Tabler or James Arnold (202) 224-2353

June 26, 2020

 

Cotton Bill to Support Semiconductor Manufacturing in U.S.

Washington, D.C.  Senators Tom Cotton (R-Arkansas), Chuck Schumer (D-New York), Josh Hawley (R-Missouri), Jack Reed (D-Rhode Island), James Risch (R-Idaho), Kirsten Gillibrand (D-New York), Susan Collins (R-Maine), Angus King (I-Maine), and Doug Jones (D-Alabama) have introduced the American Foundries Act of 2020, a bill that supports the production and development of microelectronics in the United States. The Senators aim to include the bill as an amendment in this year’s National Defense Authorization Act.

 

Bill text may be found here. Additional details may be found below.

 

“The United States revolutionized the microelectronics industry, which is essential to our safety and security today. But by ceding semiconductor manufacturing and development to countries like China, the United States has fallen behind and given the Chinese Communist Party dangerous leverage over our nation’s future. Our bill invests in the microelectronics industry here in America, where it belongs,” said Cotton.

 

“America’s technological advantage played a decisive role in our victory in the Cold War, and it will be equally important to our ability to outcompete China over the coming decades. This bill strengthens that advantage by bringing semiconductor manufacturing back to the United States, and it does so in a way that will create jobs and revitalize communities across our nation,” said Hawley.

 

“As home to one of the world’s foremost chip designers, Idaho has played a key role in the United States’ leadership in the semiconductor industry, driving forward our world-class innovation,” said Risch. “With the Chinese Communist Party’s continued efforts to dominate the rest of the world’s microelectronics industries through theft and coercion, it is critical that we work swiftly to strengthen domestic production of semiconductors and maintain our strategic competitive edge.”

 

“Semiconductors are not only essential to keeping our country on the cutting edge of technology, but are also vital to maintaining our national security,” said Collins.  “Although the U.S. semiconductor industry has been an international leader for decades, aggressive incentives by foreign governments and unfair business practices have eroded America’s dominance in this crucial sector.  The targeted investments provided in our bill would help spur the research and development necessary to keep U.S. semiconductor companies at the forefront of the industry while also preserving the good-paying, high-tech manufacturing jobs they create.”

 

“America’s technological prowess is a key source of economic innovation, and a vital building block of our national security – we cannot and must not undercut either by outsourcing the manufacturing of semiconductors,” said King.  “We need to be investing in these capabilities, to ensure that we are able to remain leaders in the world of microelectronics and to support good, high-paying jobs in communities across the country.”

 

 

“Our nation is in an economic crisis. Investing in microelectronics manufacturing and the semiconductor industry will create high paying manufacturing jobs for hard working Americans at a time when our country needs it most. The American Foundries Act of 2020 would expand our advanced manufacturing workforce and invests in cutting edge research and development. Additionally, this bill helps to strengthen our microelectronic domestic supply chain, prioritize American owned businesses over foreign production, and keep our country safe,” said Gillibrand.

 

  

Background:

 

The United States revolutionized the microelectronics industry, inventing many of the key technologies that drive the economy today. However, it is at risk of falling behind in manufacturing or “fabricating” semiconductors at home as countries in Asia, especially China, have made significant investments in their microelectronics sectors. Seventy-eight percent of cutting-edge wafer fabrication capacity is now located in Asia; North America fell behind China in this benchmark for the first time in 2019.

 

The American Foundries Act makes critical investments in commercial and defense-related microelectronics projects to ensure the United States remains a world leader in the industry. The bill includes the following measures:

 

Support for Commercial Microelectronics Projects: Authorizes the Department of Commerce to award $15 billion in grants to states to assist in the “construction, expansion, or modernization … of microelectronics fabrication, assembly, test, advanced packaging, or advanced research and development facilities.”

  

Support for Secure Microelectronics Projects: Authorizes the Department of Defense to award $5 billion in grants “for the creation, expansion, or modernization of one or more commercially competitive and sustainable microelectronics manufacturing or advanced research and development facilities capable of producing measurably secure and specialized microelectronic” for defense and intelligence purposes. This funding may go to primarily commercial facilities capable of producing secure microelectronics.

 

R&D Funding: Authorizes $5 billion in R&D spending to secure U.S. leadership in microelectronics. Requires agencies that receive this funding to “develop policies to require domestic production, to the extent possible, for any intellectual property resulting from microelectronics research and development as a result of these funds.”


  • $2 billion for DARPA’s Electronics Resurgence Initiative
  • $1.5 billion for the National Science Foundation
  • $1.25 billion for the Department of Energy
  • $250 million for the National Institute of Standards and Technology


National Microelectronics Research Plan: Establishes a subcommittee of the President’s Council on Science and Technology to produce a report each year “to guide and coordinate funding for breakthroughs in next-generation microelectronics research and technology, strengthen the domestic microelectronics workforce, and encourage collaboration between government, industry, and academia.”


 Safeguards: Prohibits firms owned, controlled or otherwise influence by the Chinese government from accessing funds provided by the legislation.

 

 

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