executive order

Recent semiconductor supply chain constraints have drawn the attention of Washington policymakers at every level. Exasperated by the global pandemic, customers of semiconductor manufacturers have sounded the alarm about the chip shortage and the downstream consequences for end-user companies and consumers. Global automakers have suffered the brunt of the impact, shuttering factories and slashing vehicle production. Last month President Biden issued an Executive Order (EO) to review and secure America’s supply chains. The stated goals of this review are to revitalize and rebuild domestic manufacturing capacity, maintain America’s competitive edge in research and development, and create well-paying jobs. Under the EO, the U.S. will also work more closely with allies to strengthen supply chains. The EO directs supply chain reviews on several critical segments, including semiconductor manufacturing and advanced packaging. The Department of Commerce will identify risks throughout the U.S. semiconductor supply chain and make policy recommendations to address those risks within 100 days of the EO’s issuance. In coordination with the White House, Congress is contemplating a variety of measures to address supply chain issues. Recently, the Senate Finance Committee held a hearing on the effects of the U.S. tax code on domestic manufacturing. Both Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) highlighted their desire for bipartisan cooperation to use the economic tools within the jurisdiction of the committee to bolster domestic manufacturing. The committee discussed two pieces of legislation that would provide significant incentives to domestic manufacturing of semiconductors. The first was the investment tax credit (ITC) for semiconductor manufacturing that was included in last year’s CHIPS for America Act but not with the other semiconductor incentives in the FY2021 National Defense Authorization Act (NDAA). An ITC would provide predictability and stability in the U.S. tax code to promote large, long-term investments for the industry. The second was the American Innovation and Jobs Act, which repeals the R D amortization requirement set to go into effect in 2022 and expands the refundable tax credit for startups and small businesses. Enhancing domestic incentives for R D and manufacturing is an important step in putting the U.S. on equal footing with other countries and would promote its continued leadership in the chip industry. Senate Majority Leader Chuck Schumer (D-NY) has announced his intention to craft a package of measures to strengthen U.S. competitiveness vis-a-vis China. The package reportedly would include funding for the microelectronics R D and Commerce grant programs that were passed in the NDAA. The Senate plans to take up the legislation in April. SEMI applauds the renewed focus on incentivizing domestic manufacturing and R D for an industry that enables countless technologies, drives innovation in sectors throughout the U.S. economy, and powers the electronic systems essential to critical infrastructure and defense systems. We look forward to working with policymakers in Congress and the Administration to support the entire domestic semiconductor ecosystem. Kimberly Ekmark is director of Public Policy and Advocacy at SEMI

On June 20, President Trump signed an executive order (EO) suspending the issuance of H-1B, H-2B, J-1 and L visas for applicants residing outside of the United States without an active work permit. The order took effect today and will be in force through the end of 2020. The suspension of H-1B and L-1 visas, in particular, likely will impact negatively the ability of U.S. companies in the semiconductor manufacturing supply chain and the broader technology community to recruit and retain global talent and to temporarily transfer international engineers and executives to support critical operations in the U.S.According to the administration, the issuance of visas for skilled temporary workers into the U.S. poses a “significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak.” Although SEMI fully supports administration efforts to address economic disruptions and job losses caused by the pandemic, we believe blanket restrictions on high-skilled immigration will be counterproductive to government and industry initiatives supporting a broad-based economic recovery. Semiconductors are the foundation of all electronics and information technology (IT), enabling innovation and growth in countless other industries including medical devices and the IT solutions that enable remote work and the connectivity desperately needed in current economic times. Access to global engineering talent and the worldwide mobility of technology executives are central to supporting the industry’s efforts to contribute to economic recovery in fields ranging from healthcare and telecommunications to transportation infrastructure.The EO authorizes the Secretaries of State, Homeland Security and Labor to establish criteria for exceptions to the blanket ban, including employment categories that: are critical to the defense, law enforcement, diplomacy, or national security in the U.S. provide medical care to currently hospitalized COVID-19 patients provide medical research at facilities to help the U.S. combat COVID-19 are necessary to facilitate the immediate and continued U.S. economic recovery The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) has classified workers in the semiconductor supply chain as essential to the effective operation of critical economic activity as the nation addresses the economic fallout of COVID-19. In lieu of rescinding the total ban on visa applications, SEMI urges the Secretaries to incorporate the CISA guidelines for semiconductor supply chain workers as they assess categories for application exceptions. SEMI will continue to advocate for programs and policies that enhance U.S. economic competitiveness, including immigration rules that ensure the U.S. can attract and retain the highest skilled talent from around the world without compromising employment opportunities for U.S. workers. As Senate Judiciary Chairman Lindsey Graham noted following the issuance of the EO, “Legal immigration is a positive for the American economy, and visa programs allowing American companies to secure qualified, legal labor throughout the world have benefitted economic growth in the United States.”Karl Kailing is manager of Public Policy and Advocacy at SEMI.