The signing of the CHIPS and Science Act into law is good news for growing several important and vital sectors of American manufacturing. Simple explanation — the bipartisan initiative will help put U.S. semiconductor and chemical producers in a much better position to compete with other countries, including China.
The CHIPS and Science Act demonstrates how federal policies can help strengthen the semiconductor supply chain, national security, and U.S. competitiveness. The Act will also help drive innovation and create more opportunities for workers, which is especially important to supporting the more than 500,000 men and women across the country who work in the business of chemistry.
Chemistry Matters
Chemical manufacturing and semiconductor production share a strong bond. It’s important to appreciate the fact that chemistry is a critical component when it comes to developing and making world-class semiconductors.
U.S. chemical manufacturers have been key to the semiconductor industry since its inception – and continue to be critical to the industry’s success. According to the semiconductor industry, the production of semiconductor wafers requires the use of no less than 500 highly specialized chemicals. And in 2021, the business of chemistry in the United States supported 367,000 workers in the semiconductor and electronic component industry.
Our industry continues to make other valuable contributions in many other ways to sustain a healthy chemical supply chain. Last year alone, chemical companies invested more than $11 billion in research and development and nearly $31 billion in capital investments in manufacturing facilities. Investments that will support semiconductor production as well as other industries that rely on chemistry.
Going Further
The CHIPS and Science Act is a significant and welcome achievement, but there is more that can be done and more opportunities for Congress and the Administration to further strengthen U.S. competitiveness. Another straightforward way for policymakers to help incentivize U.S. production of chemicals important to semiconductors would be to provide relief from tariffs.
Specifically, ACC encourages policymakers to adopt common-sense reform of Section 301 and Section 232 tariffs, reauthorization of the Miscellaneous Tariff Bill (MTB), and renewal of Generalized System of Preferences (GSP). All of which would help reduce the burden on critical industries that use imports to enhance their competitiveness.
