We are fortunate to live during the greatest period of technological innovation in human history. I’m proud to work in the semiconductor industry, a shining example of America’s technological prowess. Semiconductors – the microchips that control electronics – were invented in America, and the U.S. still leads the world in cutting-edge manufacturing and design.
The semiconductor industry is critical to America’s strength, enabling the technologies the world depends on and boosting U.S. job creation, manufacturing and global competitiveness. But America’s continued leadership of the semiconductor industry is not assured, and looming cuts to federal investments in research and development threaten to destabilize our industry, the broader tech sector and the overall economy.
Modern technology, enabled by semiconductors, has revolutionized the way we work, communicate, travel, harness energy, treat illness and entertain. But the life-changing breakthroughs of our time didn’t just happen on their own; they were discovered through hard work and ingenuity and fostered by federal investments in R&D.
The semiconductor industry has a longstanding tradition of partnering with government to drive American innovation. In the 1980s, the industry teamed with government to establish SEMATECH, which sponsors advanced semiconductor manufacturing research and is now recognized by many as the ideal model of public-private collaboration.
The industry also helps fund cutting edge university research through the Semiconductor Research Corporation (SRC), the world's leading university research consortium for semiconductors and related technologies. SRC has launched hugely successful government-industry-university research partnerships – the Semiconductor Technology Advanced Research network (STARnet) and the Nanoelectronics Research Initiative (NRI) – that are unmatched in size and scope by programs in other industries.
Trouble in D.C. Unfortunately, key federal investments in other research programs are in danger of being cut. On March 1, across-the-board budget cuts – known as the sequester – are set to reduce federal investments in R&D and stifle the new discoveries that are critical to sustaining America’s economic strength.
We recognize the need to reduce the budget deficit, but we must do so in a strategic way. History shows that federal R&D funding yields a tremendous return on investment. For example, funding for research at agencies such as the National Science Foundation (NSF), the National Institute of Standards and Technology (NIST), the Defense Advanced Research Projects Agency (DARPA), and the Department of Energy (DOE) Office of Science has enabled some of the most revolutionary inventions of the last 60 years, including the Internet, the Global Positioning System (GPS), the laser, and the large-scale integrated circuit. These technologies haven’t just improved our everyday lives; they have helped build a healthier, cleaner, stronger America.
The semiconductor industry has consistently prioritized R&D – even during difficult economic times and throughout fluctuations in sales revenue – because chip designers and manufacturers know that these investments will pay off down the road. In 2012, U.S. semiconductor companies invested 22 percent of total sales revenue in R&D – one of the highest rates of any industry. The federal government would do well to heed this example and fund basic research at sustainable levels.
Baby, bathwater Without action to address the sequester, the total budgets of NSF, NIST and DARPA could be cut by more than $500 million this year alone. This would lead to the elimination of research programs that drive innovation, job creation and economic growth. Put another way, cutting funding for these agencies would be like cutting off our nose to spite our face.
Recently, policymakers in Washington have spent more time assigning blame for the impending budget cuts than developing a solution to avert them. But there’s simply too much at stake to allow partisanship to trump smart policy.
Now is the time for action. Congress and the Administration must set aside political differences and act now to protect federal investments in R&D and ensure that America remains the world’s technology leader.
Brian Toohey is president and CEO of the Semiconductor Industry Association (SIA), the voice of the U.S. semiconductor industry in Washington, D.C.