President's Letter
George M. Scalise
President
The new year will present unprecedented challenges to the global semiconductor industry. For the first time since 2001, we expect a decline in total sales. Consumer confidence – critically important to our industry now that consumers drive more than half of all semiconductor sales – is at an all-time low. Restoring consumer confidence and ensuring access to credit are high on the agendas of the new U.S. administration and of the leaders of the major economies around the world.
The new Administration must fill some 8,000 “political” positions – many of which are involved in formulating policies that are important to the semiconductor industry. There will also be many new faces on Capitol Hill, including new leaders and new members of legislative committees with jurisdiction over issues such as tax policy, education, international trade, energy, immigration reform, funding basic research and other issues that affect the global competitiveness of America’s high-tech sector.
We must reach out and make our case to the new officials and leaders in both Congress and the Executive Branch. As other industries and state and local governments plead for costly assistance programs, we have an opportunity to show that the microelectronics industry can be a major factor in driving economic recovery.
We can offer solutions to our most pressing concerns: improving productivity and spurring economic growth, improving education, delivering better and more affordable health care, and ensuring homeland and national security. Our industry can play a huge role in addressing these and other concerns. At the same time, these issues present the potential of expanding markets for innovative semiconductor companies.
Economic growth: The IT sector which makes up only three percent of the U.S. gross domestic product accounts for 25 percent of our economic growth. According to Harvard Economist Dale Jorgenson, the IT industries as a group contribute more to economy-wide productivity growth than all other industries combined. Semiconductors are America’s second-leading exporting industry, both in total and net exports. And our goal is to become Number One.
Health care: While technology has long played an important role in diagnostics and therapy, we have barely tapped the potential of IT in making delivery more efficient. The Rand Corporation estimates that application of IT would result in better and more effective health care and annual savings of more than $77 billion while delivering other economic benefits through reduction of medical errors and improved patient services.
Energy: Semiconductor technology already makes important contributions to more energy-efficient homes, factories, automobiles, and countless other applications. Over the past 30 years, we have improved the efficiency of computer calculations by 3 million percent. Semiconductors will also help solve many problems associated with tapping alternative sources of energy such as wind and solar power.
Education: Microchips are the enabling technology for computation and communications systems that place the entire storehouse of human knowledge and experience at the fingertips of teachers and students through the ease or use internet.
National and homeland security: Leadership in technology is the backbone of our national homeland security systems.
To be successful, we must enlist the support of the Administration and Congress to enhance our competitiveness in an increasingly difficult environment. We will make funding the “America COMPETES Act” our top priority for 2009. This legislation, overwhelmingly passed by the House and Senate, addresses many of our most important concerns, with particular emphasis on funding basic research and education reform. Congress has authorized funding America COMPETES but has not followed up with an actual appropriation of funds. We will also continue to work for immigration reform and adoption of investment and tax policies that will attract investment in the U.S. from America and the rest of the world.
Economic growth: The IT sector which makes up only three percent of the U.S. gross domestic product accounts for 25 percent of our economic growth. According to Harvard Economist Dale Jorgenson, the IT industries as a group contribute more to economy-wide productivity growth than all other industries combined. Semiconductors are America’s second-leading exporting industry, both in total and net exports. And our goal is to become Number One.
Health care: While technology has long played an important role in diagnostics and therapy, we have barely tapped the potential of IT in making delivery more efficient. The Rand Corporation estimates that application of IT would result in better and more effective health care and annual savings of more than $77 billion while delivering other economic benefits through reduction of medical errors and improved patient services.
Energy: Semiconductor technology already makes important contributions to more energy-efficient homes, factories, automobiles, and countless other applications. Over the past 30 years, we have improved the efficiency of computer calculations by 3 million percent. Semiconductors will also help solve many problems associated with tapping alternative sources of energy such as wind and solar power.
Education: Microchips are the enabling technology for computation and communications systems that place the entire storehouse of human knowledge and experience at the fingertips of teachers and students through the ease or use internet.
National and homeland security: Leadership in technology is the backbone of our national homeland security systems.
To be successful, we must enlist the support of the Administration and Congress to enhance our competitiveness in an increasingly difficult environment. We will make funding the “America COMPETES Act” our top priority for 2009. This legislation, overwhelmingly passed by the House and Senate, addresses many of our most important concerns, with particular emphasis on funding basic research and education reform. Congress has authorized funding America COMPETES but has not followed up with an actual appropriation of funds. We will also continue to work for immigration reform and adoption of investment and tax policies that will attract investment in the U.S. from America and the rest of the world.
We recognize that many of our member companies are facing difficult times and making significant sacrifices in a slowing economy. At SIA, we are responding to the current conditions as well. We have taken steps that will dramatically reduce our expenditures while minimizing the impact on making our voice heard in Washington.
Now, more than ever, the industry needs an effective voice. We will continue to depend on the leaders of our member companies to speak on behalf of the industry. We are deeply appreciative of your past involvement and support and we are counting on your continued involvement and support as we face the challenges of 2009.
Sincerely,
George M. Scalise, President
