Chip funding of $50B would boost domestic jobs in construction, design, study says

The chip industry issues a study that found a $50B investment by Congress in domestic chip research and manufacturing would produce hundreds of thousands of short term jobs to build fabs in addition to long-term jobs in the industry and connected businesses. (SIA)

A new study projects a $50 billion federal investment in domestic chip plants would create 185,000 temporary American jobs and add nearly $25 billion to the U.S. economy each year until 2026 as new fabs are built.

The semiconductor industry currently employs 277,000 people in 49 states in the U.S. and supports 1.6 million U.S. jobs, according to the study by the Semiconductor Industry Association and Oxford Economics. In 2020, the industry’s total impact on the U.S. economy surpassed $246 billion.

“Leaders in Washington can spur greater U.S. economic growth and job creation, while also strengthening America’s ship supply chains, by investing boldly in domestic manufacturing incentives and research initiatives,” SIA Board Chair Bob Bruggeworth said in a statement. He is also CEO of Qorvo.

In addition to temporary job creation with construction on new fabs, a $50 billion federal investment would lead to 280,000 permanent jobs added to the economy beyond 2026, including 42,000 direct semi industry jobs, the study found.

Congress could still fund the CHIPS for America Act, which was enacted in January, with the Biden administration’s request for $50 billion to incentivize domestic chip R&D, design and manufacturing.  U.S. Sen. Majority Leader Chuck Schumer, D-NY, announced Tuesday $52 billion in emergency funding for such chip support that will be included in the U.S. Innovation and Competition Act, previously the Endless Frontier Act.

SIA and other major trade groups have consistently argued in favor of federal support for the chip sector, noting that U.S. manufacturing of chips has fallen to 12% of the global output from 37% in 1990.  Also, federal investment in chip research has remained flat as a percentage of GDP, while other nations are investing more. 

The study revealed that in addition to high-paying jobs for semiconductor design engineers, 20% of the sector include workers who have not attended college.  Across all job titles, the study found that average annual income of semi industry workers in 2020 was $170,000.  

 The study also said that the semiconductor work force employs a greater share of non-white workers than other manufacturing industries in the U.S. as well as other industries in the U.S. Based on 2019 data, Oxford Economics tabulated that 52% of semiconductor jobs are held by whites, with 4% by blacks, 28% by Asians and 13% by Hispanics.  For other manufacturing companies and industries, the portion of white workers exceeds 60%. However,with the proportion of black workers in semiconductors at just 4%, that amount is well behind other manufacturing and industries, which employ more than 10% blacks, the study found.

RELATED: Chip shortage: How soon is relief possible?