Washington, D.C. — The American Economic Liberties Project sent a letter yesterday urging the Chair and Ranking Member of the US Senate Committee on Commerce, Science, and Transportation to adopt active oversight measures to protect CHIPS Act investments in new American semiconductor manufacturing capacity.

“Thanks to the CHIPS and Science Act and other initiatives, we’ve seen great strides in rebuilding our semiconductor manufacturing capacity. But without strong demand from U.S. buyers, these efforts could fall short in creating a truly resilient domestic base,” said Laurel Kilgour, Research Manager at the American Economic Liberties Project. “Congress should use its power to ensure that federal agencies keep watch over the firms that hollowed out America’s semiconductor industry in the first place, push those dominant purchasers to make real commitments to buying U.S.-fabricated chips, and prevent CHIPS funding recipients from engaging in anticompetitive practices. Doing so would sustain the industry and inoculate it against Wall Street-driven incentives that could undermine the hard-won progress we’ve seen under the CHIPS Act.”

The letter asks Congress to require federal agencies to report on efforts to ensure that domestic demand will sustain renewed domestic supply and to ensure that CHIPS funding recipients will not be rewarded for past antitrust violations or given free rein to further consolidate the industry. The letter also calls on Congress to prepare legislation that disincentivizes buying from non-U.S. semiconductor firms.

The 2022 CHIPS and Science Act, along with the U.S. Department of the Treasury’s investment tax credit, has spurred substantial reinvestment in American semiconductor facilities. Projections indicate that the U.S. share of global semiconductor manufacturing could increase from 10% in 2022 to 14% by 2032, with cutting-edge logic chips expected to rise from 0% to 28% in the same period. However, a lack of demand commitments from major U.S. corporations could jeopardize this progress. Voluntary buying pledges to date from companies such as Apple not only fail to match the scale of demand needed to sustain the industry, but also fail to target the most advanced technological production processes, condemning even new American fabs to playing catch-up for the next decade.

The letter emphasizes that fabless semiconductor firms, such as Apple, Nvidia, and Qualcomm, continue to prioritize offshore manufacturing, thereby undermining domestic efforts. Additionally, major original equipment manufacturers (OEMs) such as HP, Dell, and Google have not made binding commitments to source semiconductors from U.S. facilities. To address these challenges, Economic Liberties calls for Congress to mandate comprehensive reporting from federal agencies, and take action to ensure domestic demand matches the increased supply and to prevent further market consolidation and anticompetitive practices.

Read the letter here.

Read Economic Liberties’ report, “Reshoring and Restoring: CHIPS Implementation for a Competitive Semiconductor Industry,” here. 

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.