Global relationships allowed semicon industry to respond quickly to pandemic: John Neuffer, SIA

The Semiconductor Industry Association (SIA) is the voice of the USA semiconductor industry. Given the country's leadership and to strengthen that further, John Neuffer, President and CEO, SIA, delivered the final keynote on Day 1 of the IESA Vision Summit 2020. SIA has been doing policy milestones for over 40 years. Much of the work includes collaborating with the global counterparts.

According to Neuffer, this year, there have been the Covid-19 pandemic, China challenge, rising costs of innovations, etc. The impact of Covid-19 has been much less than anticipated earlier. February and March saw significant increases in global sales. A lot of this demand has come from medical devices, tablets, notebooks, etc. All of these devices are powered by semiconductors. The largest market, China, has also come back online.

Global relationships allowed the semiconductor industry to respond quickly to the pandemic. The rising decoupling and anti-globalization has also made the industry strong. There are some unresolved trade issues, such as country-specific standards, market distorting subsidies, forced technology transfer, IP theft, lack of reciprocal market access. There have been responses, such as re-shoring policies, investment restrictions, etc.

China is also seeking end-to-end semiconductor supply chain self-sufficiency, and supported by massive subsidies and industrial policies. The size of China's IC market will improve from 43.5% in 2020 to 46% in 2025. Massive Chinese subsidies are also shaping the semiconductor manufacturing growth. China will double the wafer capacity over the next 10 years to roughly 30% of all semiconductor manufacturing. Despite this impressive growth, China will fall short of achieving its goal.

Rising cost of innovation
There is rising cost of innovation. The US semiconductor industry invests one-fifths of annual revenue in R&D. There is also a challenge of having access to talent, either home grown or overseas. US also has a strong immigration system. Talent is top-of-the-mind for US semiconductor executives.

There are actions that policy makers need to take to strengthen the semiconductor ecosystem. There can be an expanded access to the global markets, leveling the playing field for fab construction, improving international trade and relations, etc. The US companies have identified top five decision criteria for locating new fabs. These are Korea, China, Taiwan, Malaysia and Singapore. The USA is considered the least competitive in government incentives and labor costs.

The Information Technology Agreement (ITA) is a groundbreaking trade pact that eliminates tariffs on hundreds of high-tech products, from semiconductors to smart phones. The ITA is the most important pact for semiconductors.

Semiconductors have a huge impact across energy efficiency, robotics, AI, agriculture, smart transportation, 5G/6G, quantum computing, healthcare, etc. He concluded, "We are here to collaborate and drive the industry forward."