SIA White Paper: Semiconductor Industry Has Grown U.S. Economy through Innovation

by Semiconductor Industry Association

Sixty-four years ago this month, the U.S. Patent Office issued a patent to three semiconductor pioneers for the transistor, the building block for semiconductor innovation. Since then, the U.S. semiconductor industry has continued to innovate at an impressive rate, thus contributing significantly to U.S. economic growth. In fact, a recently published SIA white paper concludes that the U.S. semiconductor industry has accounted for 30 percent of all economic growth due to innovation in the United States between 1960-2007.

Based on conclusions from leading academic in the field, the report also highlights a few other key takeaways:

1) Innovation (or total factor productivity) is crucial for U.S. economic growth: from 1948-2010, 23 percent of total economic growth was generated by innovation. Between 2000-2005, this share was as high as 44 percent.

2) Researchers estimate the importance of innovation to economic growth will continue: roughly a quarter of U.S. productivity growth will be generated by innovation during 2010-2020.

3) In the U.S. semiconductor industry, new innovation leads to increased microchip performance along with decreased prices. Because of this unique phenomenon, semiconductor innovation has made it possible for other industries to invest in developing technologies, thereby helping them to grow their own productivity. In fact, IT-using and IT-producing industries are estimated to generate nearly all economic productivity growth in the U.S. economy from 2010-2020.

Innovation is about figuring out ways to produce more output without increasing inputs. This is exactly what the U.S. semiconductor industry does.  As a leading contributor to innovation, the U.S. semiconductor industry grows our economy in ways that many other industries simply cannot.