In an effort to stay ahead of China’s advances in the technology sector, the Semiconductor Industry Association, led by Micron CEO Sanjay Mehrotra, has asked the U.S. government for an increase in chip research funding to $5 billion over the next five years, from a current $1.5 billion. As a result of the ZTE and Huawei bans (in certain sectors) in the U.S., the Chinese government has accelerated the development of its own semiconductor industry.
Semiconductor Industry Association members also include Intel, Nvidia, AMD, Qualcomm, GlobalFoundries and more. Currently, the U.S. government is offering semiconductor companies $1.5 billion towards research and development over a five-year period. The association has asked for an increase to $5 billion over the next five years, as well as a doubling of funds for related material science research.
The organization has also asked the U.S. government for an easier immigration process so that employees from China or India could receive a permanent residency status more easily after working for the semiconductor companies.
In addition, the Semiconductor Industry Association is lobbying the U.S. government for changes to trade agreements between the U.S. and China, so that the U.S. companies get a more fair treatment when intellectual property (IP) disputes arise. U.S. companies have complained in the past that they are not fairly treated by Chinese judges in IP-related cases.
Why Are Government Funds Necessary?
Some could argue that participating companies, including Intel, Nvidia and even Micron, are multi-billion dollar companies that should pay for their own research. However, even large companies such as Intel and Nvidia sometimes avoid investing in very basic research that can take up to decades to prove fruitful if at all.
Not many companies can make such bets about new unproven technology, especially if they are a public company and have to answer to shareholders. This is where the U.S. government can come in and pay for the initial basic research until the developed technology is proven, and then each company can invest its own money to improve on it and stay ahead of competitors.
Of course, the money given for research should still be well accounted for, and, in many cases, there's reason for smaller and newer companies with potential to get preferential treatment over the large incumbent leaders.
