Micron CEO says there’s no time to delay: Congress must pass the CHIPS Act now
America is built on ideals, innovation and leadership. This month, Congress has a historic opportunity to reclaim those ideals by passing a bipartisan bill to fund U.S. leadership in semiconductor manufacturing. Some are saying we cannot afford to do this. But the reality is the U.S. cannot afford not to do this. Semiconductors are the backbone of a secure, modern economy and foundational to our national security. This issue is not political, it is generational. It is not partisan, it is transformational.
The U.S. and its allies are increasingly facing challenges to global stability and prosperity. As China and other foreign countries implement major incentive programs to strengthen their own semiconductor manufacturing and design capabilities, America’s leadership position continues to face immense threats. The shutdown in global commerce due to COVID-19 policies and ongoing geopolitical conflicts have underscored the fragility of our supply chain. We must come together to place the U.S. in a more competitive and secure position.
The United States invented semiconductor technology, but we have largely ceded semiconductor manufacturing leadership over the last several decades. According to the Semiconductor Industry Association, the U.S. share of semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today. This trend was largely driven by the aggressive incentives offered by foreign governments to localize semiconductor manufacturing. These countries recognized the importance of investing in this critical technology to drive economic growth, create supply chain assurance and protect their national security.
Funding the CHIPS program will offer upfront support to defray some of the staggering cost differential between U.S.-based manufacturing and overseas expansion. U.S.-based semiconductor manufacturing requires material incentives to overcome the 35-45% cost gap. In order to ensure that these capital-intensive investments are sustained over decades, Congress must include an investment tax credit for semiconductor manufacturing. There is already bipartisan support for both provisions, which together, would level the playing field and provide companies the confidence to make long-term investments in U.S. semiconductor manufacturing.
Together, funding for the CHIPS for America Act and ITC (the FABS Act) provisions would kickstart investment in workforce training and development, R&D, innovation, and manufacturing expansion. Investment would also show our allies and adversaries the United States is committed to providing stability and certainty for critical industries by leading the way in cutting edge technology.
Federal investments in U.S. semiconductor manufacturing will create hundreds of thousands of high-paying American jobs and enhance our national security. Leading-edge memory, logic chips, and other semiconductors are required to ensure that the Department of Defense, the Department of Energy, and the intelligence community have secure access to the most advanced computing capabilities. However, the simple reality is that if Congress fails to pass CHIPS and ITC by August, business conditions will force semiconductor manufacturers (and the ecosystem of partners that accompany modern fab projects) to invest in more cost-effective locations outside U.S. borders.
Micron is headquartered here in Boise, Idaho, and employs nearly 10,000 people in the U.S. alone. We are the only company making memory in the Western Hemisphere, and our teams lead the industry in technology innovation. Memory is essential to a range of strategic and rapidly growing data-intensive technology solutions like AI, autonomous systems, datacenters, and 5G networks. We plan to invest more than $150B in leading-edge memory manufacturing and R&D over the next ten years, to meet this significant future demand. That investment includes a DRAM manufacturing facility that would be the most advanced of its kind in the world. This facility would cost several tens of billions of dollars if built and operated in the U.S. Such a facility would be dramatically less expensive if built in Asia. We must alter those economics to make long-term semiconductor manufacturing investment viable in the U.S.
It would be a grave strategic error for the United States to limit our future prospects by not enacting competitive policies that level the playing field, secure a leadership role for the US, and protect a long-term interest in technology leadership and economic competitiveness.
Companies like Micron must make decisions now or risk falling behind. Businesses cannot wait for political election cycles. Now is the time for Congress to invest in the future of the country and fund the CHIPS Act and the Investment Tax Credit. We are looking to our leaders for leadership right now. It has never been more critical.
This story was originally published July 16, 2022 at 4:00 AM.