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Chip Industry Wants $50 Billion to Keep Manufacturing in U.S.

  • SIA asks for federal money as China backs domestic chip sector
  • Trade war, pandemic expose risks of making chips overseas

The U.S. chip industry said as much as $50 billion in federal incentives will be needed to halt a decades-long trend of manufacturing moving overseas as China spends heavily to become a leading semiconductor producer.

The federal government needs to deploy $20 billion to $50 billion to make the U.S. as attractive a location for plants as Taiwan, China, South Korea, Singapore, Israel and parts of Europe, the Semiconductor Industry Association said in a study released Wednesday. Failure to do that threatens U.S. leadership of the sector as a whole, it added.

The lobbying group, which represents companies such as Intel Corp. and Qualcomm Inc., is making the pitch at a time when it believes Washington is more open to listening. The China-U.S. trade war and supply-chain disruptions caused by the pandemic have revealed the risks of having such vital components made abroad.