Semiconductor Industry Praises President's Long-Term Support for Increased Science Research Funding

America's largest export industry deeply concerned over international tax provisions

WASHINGTON,  Feb. 17, 2011 /PRNewswire-USNewswire/ -- The Semiconductor Industry Association (SIA), representing US leadership in semiconductor manufacturing and design, today announced that it strongly supports the Administration's proposal for a permanent and enhanced research & development (R&D) tax credit as well as increased funding for critical science research through the National Institute of Standards and Technology (NIST) and the National Science Foundation (NSF) in the FY2012 President's Budget. However, several international tax provisions contained in the budget proposal are counterproductive to long-term global competitiveness for SIA member companies.

"The President's proposal to increase funding for scientific research and to make the R&D tax credit permanent is very encouraging. It shows that, on these issues, the Administration has a deep understanding that the advantages of increasing these types of investments is the best way to stimulate our innovation economy for the long term," said Brian Toohey, president, Semiconductor Industry Association. "However, there are several critical international tax issues that will stifle the global competitiveness of America's top employers. On these issues we strongly urge the Administration and Congress to carefully consider a better way forward."

Increased funding for NIST and NSF is critical in supporting America's innovation race to develop the next wave of technology that will allow for faster, smaller and more energy efficient electronic devices beyond our current limits. To work on this challenge the semiconductor industry, over 30 universities, NIST, NSF, and state and local governments are successfully collaborating through the Nanoelectronics Research Initiative (NRI), which funds research at U.S. universities to advance nanoelectronics. The future of the technology industry in America and our global competitiveness rests on the research funded at NRI centers across the nation. Further advancing an agenda of increased scientific research is the President's continued proposal to make the R&D tax credit permanent and to include a 3 percent point increase in the alternative simplified credit. These combined efforts will reinforce a culture of innovation and scientific exploration that will pay dividends well into the future.

In addition to fueling scientific research we must also ensure that American companies are not put at a disadvantage compared to foreign-based competitors. Unfortunately, the FY2012 budget proposal related to international tax provisions does exactly that. SIA member companies, who represent the nation's largest export industry, face fierce international competition and an outdated and cumbersome U.S. tax system puts them at a disadvantage. This hinders their ability to grow their operations, hire more Americans and build equity for their shareholders. Certain tax provisions included in the budget proposal would exacerbate this problem.

"SIA member companies represent America's largest export industry and our contribution to the economy is enormous," continued Toohey, "but without a level playing field in our tax policies, the strength of the U.S. semiconductor industry could be in jeopardy.  Changes to the tax code must be done in a comprehensive fashion. The semiconductor industry has been clear as to the significant tax factors that help determine the location of billions of dollars of future manufacturing and R&D investments.  We stand ready to work with the Administration and Congress to ensure that the U.S. maintains its technology leadership."

About the SIA

The Semiconductor Industry Association, SIA, is the voice of the U.S. semiconductor industry, America's number-one export industry over the last five years and a bell wether measurement of the US economy. Semiconductor innovations form the foundation for America's $1.1 trillion dollar technology industry affecting a U.S. workforce of nearly 6 million. Founded in 1977 by five microelectronics pioneers, SIA unites over 60 companies that account for 90 percent of the semiconductor production of this country. Through this coalition SIA seeks to strengthen US leadership of semiconductor design and manufacturing by working with Congress, the Administration and other key industry groups. The SIA works to encourage policies and regulations that fuel innovation, propel business and drive international competition in order to maintain a thriving semiconductor industry in the United States. Learn more at www.sia-online.org

SOURCE Semiconductor Industry Association