What would you say is one of the inventions created in the last half of the twentieth century that powers our modern economy? Maybe the computer? Perhaps cell phones? GPS? How about the internet? There is one product, invented in the United States that makes all those, and so many other inventions, possible: the semiconductor chip.
Semiconductors are ubiquitous, used in applications across every sector of our economy and fostering technological advances that transform every aspect of our lives. Unfortunately, we have lost our edge in domestic semiconductor manufacturing. Consider, over the past eight years, the share of U.S. semiconductor manufacturing capability fell by 10%. This leaves America vulnerable to supply chain problems and potentially cut off due to conflicts, such as China acting on its threats to Taiwan. Given recent events, this is a real and pressing concern.
Increasing our ability to build semiconductors in America should be a priority. Major semiconductor manufacturing facilities are located in 18 states, which doesn’t include Alaska. Why not here? Our state should aspire to bring the industry here. We have abundant land for facilities. Our location in the Pacific Rim is helpful for trade in Asian markets.
Congress is negotiating a compromise to legislation that passed the House and Senate in different versions that focuses on our lack of chip manufacturing capability. The version of the bill that’s finally approved needs to include funding for the CHIPS Act grants. This funding would invest $52 billion in domestic semiconductor research, design, and manufacturing.
Coupled with CHIPS Act funding should be an investment tax credit, which would establish long-term incentives for major capital expenditures in the construction of new semiconductor manufacturing facilities. These facilities are capital-intensive and can cost billions of dollars before a single chip is made or sold. As we Alaskans know from our experience with natural resource development, competition for investment is worldwide, and the U.S. must compete on a global stage for limited dollars.
U.S. semiconductor exports yield our economy up to $62 billion per year and create good-paying jobs for Americans. There is a direct correlation between R&D and market share in this sector. Taiwan figured that out and now that country produces more semiconductors than any other. China is right on their heels and looking to expand.
The legislation addresses another vital aspect of the current state of our manufacturing capability. We need semiconductors to bolster our military readiness and electric infrastructure integrity. The U.S. is home to the world’s preeminent military. We need manufacturing capability to sustain our dominant position. I encourage Senators Lisa Murkowski and Dan Sullivan, who rightfully place huge emphasis on national security, to support this legislation.
America shouldn’t leave itself dependent on others for a product that it so critical to our economy and national defense. Congress needs to pass the bill so CHIPS funding and the investment tax credit can move us to a future with greater ability to manufacture chips. Let’s build semiconductor chips in Alaska for America.
Sara Rasmussen represents the 22nd District in the Alaska House of Representatives. She is a fifth generation Alaska and a small business owner, and lives in Anchorage.