CHIPPING IN
THE POSITIVE IMPACT
OF THE SEMICONDUCTOR INDUSTRY
ON THE AMERICAN WORKFORCE AND
HOW FEDERAL INDUSTRY INCENTIVES
WILL INCREASE DOMESTIC JOBS
MAY 2021The Semiconductor Industry Association (SIA) is the voice of the
semiconductor industry, one of America’s top export industries and
a key driver of America’s economic strength, national security, and
global competitiveness. Semiconductors—the tiny chips that enable
MAY 2021
modern technologies—power incredible products and services that have
transformed our lives and our economy. The semiconductor industryAll data shown in tables and charts are Oxford
directly employs nearly a quarter of a million workers in the United Economics’ own data, except where otherwise
States, and U.S. semiconductor company sales totaled $208 billion in stated and cited in footnotes, and are copyright
2020. SIA represents 98% of the U.S. semiconductor industry by revenue (c) Oxford Economics Ltd.
and nearly two-thirds of non-U.S. chip firms. Through this coalition, SIA
This report is confidential and proprietary
seeks to strengthen leadership of semiconductor manufacturing, design,
to the Semiconductor Industry Association
and research by working with Congress, the Administration, and key
(SIA) and may not be published or distributed
industry stakeholders around the world to encourage policies that fuel
without their prior written permission. The
innovation, propel business, and drive international competition.
modeling and results presented here are based
Learn more at semiconductors. on information provided by third parties, upon
which Oxford Economics has relied in producing
its report and forecasts in good faith. Any
subsequent revision or update of those data will
affect the assessments and projections shown.
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Michael Reid
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Senior Economist
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About the report 2 CONTENTS
Executive summary 4
1. Introduction6
2. The economic contribution of the U.S. semiconductor industry 7
2.1 Total contribution to U.S. GDP7
2.1.1 Direct impact 8
2.1.2 Indirect impact 8
2.1.3 Induced impact 8
2.2 Jobs impact of the semiconductor industry 8
2.2.1 Jobs multiplier10
3. The semiconductor workforce 11
3.1 Semiconductor workforce by state 11
3.1.1 Location quotients 12
3.2 Occupational profile 13
3.3 People who work in the semiconductor industry 14
3.3.1 Race and ethnicity 14
3.3.2 Age distribution15
3.3.3 Educational attainment15
4. The economic impact of federal chip incentives17
4.1 Total impact on the U.S. economy during the build-out phase, 2021 to 2026 17
4.2 Total temporary jobs created during the build-out phase, 2021 to 2026 18
4.3 Fab operational impacts 19
4.4 R&D impacts19
4.5 Construction impacts 20
4.6 Capex and equipment outfitting impacts 20
4.7 Long-term, positive incentive program impacts 21
5. The many uses of semiconductors 22
6. Conclusion23
7. Appendix 24
Creating the database24
An introduction to economic impact analysis 25
Impact model structure26
About IMPLAN 26
Glossary of terms 27
Table of contents 3 EXECUTIVE SUMMARY
With its origin in the latter part of the 20th century, the semiconductor industry has grown to
become one of the most important segments of the global economy. Today, semiconductors
are found in nearly every electronic device, including phones, cars, and appliances. They1.85 million
enable nearly every industry, reflected by global sales of over $440 billion in 2020.1 Over 300U.S. jobs
downstream economic sectors accounting for over 26 million U.S. workers are consumers of
supported in 2020
and are therefore enabled by semiconductors as a critical input for their sectors.
Beyond providing inputs to nearly every industry, the U.S. semiconductor industry is
essential to the U.S. economy, generating value for the economy, stimulating jobs, and paying
income to workers. In total, the U.S. semiconductor industry supported 1.85 million U.S. jobs
in 2020. The industry directly employs more than 277,000 domestic workers in R&D, design,
and manufacturing activities, among others.
In addition, for each U.S. worker directly employed by the semiconductor industry, an
additional 5.7 jobs are supported in the wider U.S. economy, either in the supply chains of
the semiconductor industry or through the wage spending of those employed by the firms
themselves or their supply chains.
INDUCED
R
INDI ECT
REC
IT FIG. 1: Economic
Income DGDP
(US$, billions)(US$, billions)impact of the
semiconductor
$160.8 $51.8$61.9 $ 47.1$55.8$98.6 $92.0 $246.4industry on the
TOTAL TOTALU.S., 2020
277,000
669,498
905,551
1,852,049
TOTAL
Employment
1 See semiconductors/global-semiconductor-sales-increase-6-5-to-439-billion-in-2020.
Executive summary 4Now, more than ever, there is a need to expand semiconductor R&D, design, and
manufacturing in the U.S. through robust federal investments such as those called for in
the CHIPS for America (CHIPS) Act, federal legislation enacted in January 2021 but not yet$147.7 billion
funded. By supporting the expansion of the domestic semiconductor industry, nearly all other GDP impact from
sectors of the economy will benefit, beyond the semiconductor industry itself.2021 to 2026
We estimate a $50 billion federal investment program to incentivize domestic semiconductor
manufacturing would add $24.6 billion annually to the U.S. economy and would create an
average of 185,000 temporary jobs annually throughout the U.S. economy from 2021 to
2026. Over this six-year build-out period, therefore, the cumulative annual impact of such an