Insights for technology professionals

Positive outcomes from a federal investment in the semiconductor industry

Posted on March 16, 2022 by Jack Trompert


The modern semiconductor industry began in 1947 with the invention of the point-contact transistor at Bell Laboratories. In the 75 years since then, the semiconductor industry has become one of the most important business sectors in the world economy. It contributes to every major industry, from electronic devices to appliances. 

Today, semiconductor companies are producing more chips than ever — and the demand continues to expand every year. According to the Semiconductor Industry Association (SIA)/Oxford Economics report, “The strong demand for all types of chips facilitates the need for a broader domestic support ecosystem, including manufacturing equipment, materials, design services, testing labs, and R&D activity.”

The report states that today’s semiconductor industry includes: 

  • $246.4B contribution to the U.S. GDP 
  • 277,000+ U.S. workers directly employed in high-paying R&D, design, and manufacturing jobs
  • 1.6M jobs outside of semiconductor supported by the industry
  • $440B contribution of all semiconductor businesses to the global economy

U.S. Investment Would Have an “Enduring Positive, Long-term Ripple Effect”

The study estimated the impact of a $50 million federal investment in the U.S. semiconductor from a fund such as CHIPS for America (CHIPS) Act, the federal legislation enacted in January 2021. While it would be a one-time contribution to the industry, the result of a domestic semiconductor industrial infrastructure cash infusion would have an “enduring positive, long-term ripple effect on jobs and the U.S. economy,” said the report.

For example, semiconductors are a critical input for more than 300 downstream economic sectors, accounting for over 26 million U.S. workers today. The semiconductor industry’s jobs multiplier is 6.7, meaning for each U.S. worker directly employed by the industry, an additional 5.7 jobs are supported in the wider U.S. economy.  

While the U.S. semiconductor industry is strong, it could benefit from a robust federal monetary infusion, the report states, for three primary reasons:

  • The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today, according to a SIA/Boston Consulting Group report
  • U.S. federal investment in semiconductor research has been flat as a share of GDP, while other governments have invested substantially in research initiatives to strengthen their semiconductor capabilities, according to a SIA report
  • Global semiconductor supply chain vulnerabilities have emerged in recent years that must be addressed through government investments in chip manufacturing and research, according to a SIA/BCG study

According to the report, “The strong demand for all types of chips facilitates the need for a broader domestic support ecosystem including manufacturing equipment, materials, design services, testing labs, and R&D activity. By supporting the expansion of the domestic semiconductor industry, nearly all other sectors of the economy will benefit, beyond the semiconductor industry itself.”

According to Bob Bruggeworth, President, CEO, and Director of Qorvo and SIA Board Chair, “American jobs are built on semiconductors, and workers in our industry are driving the innovations critical to America’s economy, national security, and global leadership in the technologies of today and tomorrow. Leaders in Washington can spur greater U.S. economic growth and job creation, while also strengthening America’s chip supply chains, by investing boldly in domestic manufacturing incentives and research initiatives.”

Projected Estimates from $50M U.S. Semiconductor Federal Investment

Here are highlights of the report’s findings on the impact of investing $50 billion in the U.S. semiconductor industry through the federal investment program to incentivize domestic semiconductor manufacturing, including all channels of impact — direct, indirect (supply chain), and induced (wage spending: 

  • $24.6B added to U.S. economy annually 
  • 280K permanent new jobs added to the U.S. economy
  • 185K temporary jobs added annually from 2021 to 2026
  • 42K new workers directly employed in the U.S. semiconductor industry
  • 1.1M cumulative annual impact on jobs 
  • 2.13M total jobs supported in the U.S. by 2027
  • $147.7B cumulative annual impact on GDP 

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Jack Trompert

In 2010, Jack and Janet Trompert started Talent 101 with a clear new vision on how to deliver talent to the marketplace. To work at Talent 101 is to be a part of something creative and big. From our modest roots as an ambitious startup, to becoming a global workforce solution provider to the world’s most recognized semiconductor companies, our growth and momentum owes a lot to our strong company culture of customer service, can do attitude, sense of urgency and always focus on the client and talent.