Semiconductor industry urges targeted trade strategy, investment and workforce steps to sustain U.S. lead

Semiconductor industry leaders told the Senate Finance Committee on May 14, 2025, that targeted trade measures, not blanket tariffs, are needed to preserve U.S. competitiveness as domestic chip manufacturing expands under CHIPS‑era investments.

David Isaacs, vice president for government affairs at the Semiconductor Industry Association, said the industry has announced “investments of over $540,000,000,000 in dozens of projects in 28 states” and warned that a leading‑edge fabrication plant can cost “as much as 20 to $30,000,000,000.” He added that “over 70% of our sales are overseas” and that access to global markets is necessary to sustain the capital and R&D intensity of the sector.

Isaacs told senators that broad tariffs on inputs and equipment could “increase the cost of critical inputs in American manufacturing and therefore weaken the competitiveness of the U.S. industry.” He recommended a pro‑growth package: extend and strengthen the advanced manufacturing investment tax credit (including adding chip research and design), increase R&D funding, invest in workforce and STEM, streamline permitting and regulatory processes for fabs, and pursue trade strategies to increase market access, including sectoral agreements for semiconductors.

Members raised concerns about tariffs affecting fab equipment and other sophisticated imported inputs; Isaacs noted that a large share of fab equipment costs are imported and urged strategic, phased exemptions for critical inputs. Senators discussed building domestic capacity while maintaining secure access to allied suppliers and export‑control coordination for national security purposes.

No committee votes occurred; witnesses emphasized a mix of domestic investment and targeted trade policy rather than broad import duties.