CHIPPINGIN THEPOSITIVEIMPACT OFTHESEMICONDUCTORINDUSTRY ONTHEAMERICANWORKFORCEAND HOWFEDERALINDUSTRYINCENTIVESWILLINCREASEDOMESTICJOBS MAY2021 SIA SEMICONDUCTOROXFORD INDUSTRY ASSOCIATIONECONOMICS CONTENTS Executivesummary4 1.Introduction6 2.TheeconomiccontributionoftheU.S.semiconductorindustry TotalcontributiontoU.S.GDP7 2.1.1 2.1.212pdula1ipu]8 2.1.3Inducedimpact8 2.2Jobsimpactofthesemiconductorindustry8 2.2.1Jobsmultiplier10 3.Thesemiconductorworkforce11 3.1Semiconductorworkforcebystate11 3.1.1Locationguotients12 3.2Occupationalprofile13 E'EPeoplewhoworkinthesemiconductorindustry14 3.3.1Raceandethnicity14 3.3.2Agedistribution15 3.3.3Educationalattainment15 4.Theeconomicimpactoffederalchipincentives17 4.1TotalimpactontheU.5.economyduringthebuild-outphase,2021to202617 4.2TotaltemporaryJobscreatedduringthebuild-outphase,2021to202618 4.3Faboperationalimpacts19 4.4R&Dimpacts19 4.5Constructionimpacts20 4.6Capexandequipmentoutfttingimpacts20 4.7Long-term,positiveincentiveprogramimpacts21 5.Themanyusesofsemiconductors22 6.Concluslon23 7.Appendix24 Creatinothedatabase 24 Anintroductiontoeconomicimpactanalysis25 Impactmodelstructure26 AboutIMPLAN26 Glossaryotterms27 SDA SEMICONDUCTOROXFORDECONOMICS 3 Tableofcontents ASSOCIATION EXECUTIVESUMMARY Withitsorigininthelatterpartafthe20thcentury,thesemiconductorindustryhasgrownto becomeoneofthemostimportantsegmentsoftheglobaleconomy.Today,semiconductors arefoundinnearlyeveryelectronicdevice,includingphones,cars,andappliances.They1.85million enablenearlycveryindustry,reflectedbyglobalsalesofever$440billionin2020.Over300 downstreameconomicsectorsaccountingforover26millionU.S.workersareconsumersof andarethereforeenabledbysemiconductorsasacriticalinputfortiheirsectors U.S.jobs supportedin2020 Beyondprovidinginputstonearlyeveryindustry,theU.S.seniconductorindustryis essentialtotheU.S,economy,generatingvaluefortheeconomy,stimulatingjobs,andpaying incometoworkers.Intotal,theU.S.semiconductorindustrysupported1.85millionU.S.jobs in2020.Theindustrycdirectlyemploysmorethan277.000domesticworkersinR&D,design,andmanufacturingactivities,amongothers. Inaddition,foreachU.5.workerdirectlyemployedbythesemiconductorindustry,an additional5.7jobsaresupportedinthewiderU.S,economy,eitherinthesupplychainsot thesemiconductorindustryorthroughthewagespendingofthoseemployedbythefirms themselvesortheirsupplychains. INDUCED INDIRECT DIREC) IncomeGDPFIG,1:Economic impactofthe (USS,billions)(US$,billions) $160.8$51.8$61.9$47.1$55.8$98.6$92.0$246.4 TOTALTOTAL semiconductor industryontheU.S.,2020 (277,000) 669,498 905,551 ,852,049 TOTAL Employment eehttps://wvion-in2020. SOAMICONDUCTOR OCIATION OXFORDECDNOMICS Executivesummary Now,morethanever,thereisaneedtoexpandsemiconductorR&D,design,and manufacturingintheU.S,throughrobustfederalinvestmentssuchasthosecalledforin theCHIPSforAmerica(CHIPS)Act,federalleqislationenactedinJanuary2021butnotyet$147.7billion funded.Bysupportingtheexpansionofthedomesticsemiconductorindustry,nearlyallother sectorsoftheecanomywillbenefit,beyondthesemiconductorIndustryitself. GDF 20211t02026 Weestimatea$5Obillionfederalinvestmentprogramtoincentivizedomesticsemiconductormanufacturingwouldacd$24.6billionannuallytotheU.S.economyandwouldcreateanaverageof185,000temporaryjobsannuallythroughouttheU.S.economyfrom2021to 2O26.Overthissix-yearbuild-outperiod,therefore,thecumulativeannualimpactofsuchan incentiveprograrnonGDPandjobswouldbe$147.7billionand1.1million,respectively.These economicbenefitscombineallthechannelsofimpactdirect,indirect(supplychain)andinduced(wagespending). AS5Obillionfederalinvestmentprogramtoincentivizedomesticsemiconductor manufacturingcanbeexpectedtosubstantiallyincreasethedemandfortalentwithin thesemiconductorindustry.AsimoredomesticinvestrmentsinserniconductorR&D, design,andmanufacturingcomeonlineandincreaseproduction,theindustrywillneed tohiremoreworkersinarangeofoccupations,Asaresultoftheseincentives,the enduringpositiveimpactontheU.S.economyisanedditional280,000newjobs,ofwhich 42,000wouldbedirectlyemployedinthedomesticsemiconductorindustry.ThiswouldboostU.S,semiconductorIndustryemploymentto319,000andItstotalJobsimpactto 2.13millionin2027. FIG.2:Thetotalannualjobsimpactofa$50billionfederalsemiconductormanufacturingincentiveprogram,2021-2026 000'0SE 300,000 250,000 0880 Operations Capex [enu 150,000 Construction 100,000●R&D 50,000 202120222023202420252026 dJobgsinsthatwouldccmefr1federsfundirgforthcseresearchprovisioris.Becauselegslationtofundthe hypotheticalSSDbiienfederalprcqramteincentivizedomesticseiconductormaufacturinthatwasmodelesintherecentSIA/9.CG[ointreport,Turn/tgtheT/deforSet/cenducterMa%factur/ng/nt/teU/.5. SDA SEMICONDUCTOR ASSOCIATIONECONOMICS Executivesummary5 INTRODUCTION Withitsoriginsinthelatterpartofthe20thcentury,thesemiconductorindustryhas growntobecomeoneofthemostimportantsegmentsoftheglobaleconomy.Today. semiconductorsarefoundinnearlyeveryelectronicdevice,inclucingphones,cars,and $440billonIn2020alone Today,semiconductorcompaniesareproduc