“Fact-Checking Biden’s Claims on Semiconductor Production Capacity in the U.S.”
Understanding Biden’s Claim
In a recent primetime interview with ABC News’ George Stephanopoulos on July 5, President Joe Biden made several bold claims about various topics. One of the most critical claims was regarding the U.S. share of global semiconductor production capacity. Biden stated that the U.S. share had declined to “virtually nothing.” While this claim points to a significant issue, it is somewhat exaggerated.
The Reality of U.S. Semiconductor Production
The U.S. was a dominant player in the semiconductor industry back in 1990, accounting for about 40% of the global semiconductor fabrication capacity. However, by 2019, this share had significantly dropped to 11%, placing the U.S. fifth globally behind South Korea, Taiwan, Japan, and China. This decline has raised alarms about national security and industrial competitiveness, particularly as semiconductors are crucial for various technologies, from smartphones to advanced military systems.
The CHIPS and Science Act
In response to the declining semiconductor manufacturing capacity, President Biden signed the CHIPS and Science Act in August 2022. This landmark legislation includes a substantial $39 billion investment to boost domestic chip manufacturing. The goal is to revitalize the U.S. semiconductor industry and reduce dependency on foreign suppliers.
Projected Improvements in Capacity
A report by the Semiconductor Industry Association and Boston Consulting Group in May 2023 projected that the investments spurred by the CHIPS Act would increase the U.S. share of global fab capacity from 10% today to 14% by 2032. Without these investments, the share was expected to plummet to 8% by 2032. This projection underscores the importance of the CHIPS Act in maintaining and enhancing the U.S. position in the global semiconductor market.
The Bigger Picture
While President Biden’s claim about the U.S. semiconductor production capacity was exaggerated, it highlighted a critical issue. The significant decline from 40% to 11% over three decades reflects broader challenges faced by the U.S. in maintaining industrial leadership in key technology sectors. The steps taken through the CHIPS and Science Act represent a concerted effort to address these challenges and ensure that the U.S. remains competitive in the global market.
Conclusion
In summary, President Biden’s statement about the U.S. semiconductor production capacity, although an exaggeration, brings attention to a significant issue. The decline in capacity has been a cause for concern, but with the CHIPS and Science Act, there is hope for revitalization and growth. It is crucial for the U.S. to continue investing in this sector to secure its industrial and technological future.
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