Semiconductor industry urges expansion of successful trade agreement

USA: The Semiconductor Industry Association (SIA), representing US leadership in semiconductor manufacturing and design, told members of the US International Trade Commission (ITC) during a public hearing that a successful trade pact – the Information Technology Agreement (ITA) – should be expanded to keep pace with the latest semiconductor products and technologies.

The ITA promotes fair and open trade by providing for duty-free treatment of certain information technology products, including semiconductors, but the list of covered products has not been updated since the ITA’s inception in 1996.

“The Information Technology Agreement has been instrumental in helping the US semiconductor industry drive innovation, create jobs, lower consumer prices and connect communities throughout the world,” said Ian Steff, SIA VP for Global Policy and Technology Partnerships. “But in order to keep pace with current semiconductor technologies, the ITA should be expanded to include the industry’s latest products.”

Since the ITA’s inception in 1996, two-way trade of products covered by the ITA has grown from $1.2 trillion to $4 trillion, and US exports of information and communication technology (ICT) products have almost tripled over the past 15 years to an estimated $1.4 trillion in 2010. Semiconductors, in particular, have benefited from the ITA. A recent study by the World Trade Organization (WTO) on the ITA notes that semiconductors are the largest information technology product category in the ITA and accounted for 33 percent of global exports of such products in 2010.

As consumers demand ever more sophisticated integrated circuit performance, semiconductor designers and manufacturers increasingly integrate additional electronic components into new types of next generation chips to increase functionality. SIA cited two such semiconductor products that should be covered by an expanded ITA: multi-component integrated circuits (MCO) and multi-chip packages (MCP). MCOs are estimated to comprise between 1.5 percent and 3 percent of the global semiconductor market. Inclusion of MCOs in an expanded ITA would result in estimated global tariff savings of between $94 million and $188 million.

“Expanding the ITA to cover these products would help ensure that the US remains a leader in semiconductor exports, innovation and growth,” said Steff.