SEMI Calls for Federal R&D Tax Credit Extension
Staff -- Semiconductor International, 3/1/1998
Based on a
detailed economic analysis, Semiconductor Equipment and Materials International (SEMI,
Mountain View, Calif.) called for the Clinton administration and Congress to renew and
make permanent the federal R&D tax credit, which expires June 30. The credit is viewed
as vital to the semiconductor equipment and materials industry, which is preparing for 300
mm wafer technology conversion.
The Coopers & Lybrand study demonstrated that the R&D credit contributes directly to productivity and economic growth in the United States. According to the findings, making the R&D credit permanent would stimulate $41 billion additional R&D (in 1998 dollars) over the 1998-2010 period. Ultimately, the study noted that the R&D credit "pays for itself" by spurring technological innovations that benefit the entire economy and increase output per worker as well as raising taxable incomes.
The semiconductor equipment and materials industry faces one of the highest R&D/sales ratios of any U.S. industry, and these costs will increase this year. The average R&D expenditure for equipment firms normally ranges from 10% to 15% of sales, but may reach as high as 20% of sales this year, according to SEMI.
The study was commissioned by the R&D Credit Coalition, an industry group of which SEMI is a member.
