The US could face a chip vendor exodus if the government doesn't make reforms

Chip firms could leave US

The head of an industry trade group has said that chip making firms could leave the US in less than five years if the government does not amend the immigration, education, tax and research-funding policies that are causing problems.

George Scalise, who leads the Semiconductor Industry Association and former executive with AMD and Motorola, is lobbying the government to spend more on education in sciences and to give more foreign engineering graduates work visas.

"We are looking for the government to do those things that will make this investment worthwhile here," he said. According to the Semiconductor Industry Association the US share of chip making in the most advanced plants fell to less than 15 percent in 2005 compared to 35 percent in 1999, while about 80 percent of planned new semiconductor plants are for construction outside the US, reported the Salt Lake Tribune.

If such measures are not taken to counter balance this, it may cost the industry its position as the second-largest US exporter of manufactured goods, Scalise asserts.

"I doubt if it’s five years. A couple of years out it becomes hard to turn things back. Manufacturing plants will go overseas."

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