Semiconductor firms call for more federal R&D spending

Semiconductor Industry Association warns the U.S. risks losing its technological edge unless its government increases funding for research and development (R&D) and reforms the nation's education system.

The U.S. is in danger of losing its technological edge unless its government increases funding for research and development (R&D) and reforms the nation's education system, members of the Semiconductor Industry Association (SIA) said Wednesday.

SIA members, including Intel Corp. Chief Executive Officer Craig Barrett, called for a yearly 7 percent increase in the National Science Foundation's (NSF's) research budget, as well as increases in U.S. federal funding of microelectronics and nanomanufacturing programs. They also called for a math and science program in the No Child Left Behind Act, championed by President George Bush and signed into law in 2002.

Without a renewed national focus on R&D and education, the U.S. semiconductor industry could run into technology and economic roadblocks by 2020, SIA members said in a Washington, D.C., press conference.

Barrett called R&D spending and educated workers the foundations for innovation and creativity in the U.S. But U.S. federal government spending on R&D -- which funds university-based research in the U.S. -- has been flat for about 25 years, SIA members said.

The U.S. ranks near the bottom of industrialized nations in science and math education, based on test scores, and the number of U.S. residents applying for doctorate-level degrees is shrinking, Barrett said. At the same time, more foreign students are either staying home for their advanced educations or returning to their home countries after receiving their degrees, instead of working in the U.S., he said.

"From a people standpoint, we're not doing a particularly good job," Barrett said. "I don't have particular concerns in the near term about our industry, but I have great concerns about our industry 10 to 15 to 20 years out."

In Bush's fiscal year 2006 budget, the R&D budget at the National Science Foundation would increase 2.8 percent from 2005 levels to $4.2 billion, but more than half of the increase would go into facilities construction. SIA members noted that Intel's yearly R&D budget, about $5 billion, is larger than the NSF's R&D budget, even though the agency's R&D budget provides a significant chunk of the funding for university research in the U.S.

SIA members noted 2005 is the 40th anniversary of the publication of a paper by Gordon Moore, then director of the R&D laboratories at Fairchild Semiconductor. In the paper, Intel co-founder Moore predicted that technological advances would allow the number of transistors per square inch on integrated circuits to double every year. The prediction, commonly called Moore's Law, was later amended to predict a doubling of transistors about every 18 months, and so far, the semiconductor industry has kept pace.

But the limits of the current transistor technology, plus problems with the U.S. education system and with R&D spending could put Moore's Law in jeopardy in 15 to 20 years, Barrett said. A slowdown in the U.S. semiconductor industry, and a resulting slowdown in the U.S. IT industry, would hurt the country's economy, SIA members said.

White House officials have defended the Bush R&D budget, saying it's a responsible budget as the U.S. government faces a huge deficit in 2006. Total government R&D spending has risen steadily during the Bush administration, White House officials said, and the Bush administration has budgeted a total of $26.8 billion for the NSF in his five budgets compared to $18.7 billion in the last five budgets offered by former President Bill Clinton.

John Marburger, director of the White House Office of Science and Technology Policy, called cuts in overall R&D funding "difficult cuts" when Bush released his 2006 budget in February.

A White House spokesman also disputed some of the SIA's criticisms. The NSF's budget has increased 26 percent since 2001, and the number of U.S. residents in science and engineering graduate programs grew by more than 5 percent between 2002 and 2003, said Robert Hopkins, a spokesman for Marburger.

Hopkins also noted that the U.S. spends three times as much money on R&D than Japan and more than the entire European Union. "The U.S. has by far the largest, most well-funded, dynamic and innovative science enterprise in the world," he said in an e-mail. "Despite growing global competition, the U.S. is still the undisputed global leader in science."

Asked if the U.S. Congress will act on SIA's recommendations without an immediate crisis to respond to, SIA President George Scalise said he wasn't sure. "The awareness is there," he said of the U.S. education and R&D challenges. "Whether the national will is there to match that is where the question lies."

SIA is not alone in calling for more federal education and R&D funding. Earlier this month, TechNet, a trade group made up of tech chief executives, included R&D and education funding increases in its priorities for Congress.

Copyright © 2005 IDG Communications, Inc.

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