North Carolina, Semiconductors, and TPP

by Amrietha Nellan

The U.S. is a leading manufacturer and exporter of semiconductors and owns more than half of global market share. America’s competitive advantage in semiconductors stems from a culture of innovation, strong intellectual property (IP) protection, and a talented, skilled workforce. North Carolina is a leading semiconductor exporter and at the forefront of developing the next generation of semiconductors that have the opportunity to support new domestic manufacturing and transform our energy use for a cleaner, greener future.

In 2014, President Obama named the University of North Carolina (UNC) the winner of the Next Generation Power Electronics Innovation Institute. One of three innovation institutes across the country aimed at growing U.S. manufacturing, North Carolina focuses on developing wide bandgap (WBG) semiconductors. WBG semiconductors build on existing U.S. manufacturing capabilities to create a more powerful and energy efficient semiconductor. Moreover, the institute partners with a nearby manufacturer to better adopt the improved technology at a lower cost, giving these U.S. products a competitive edge in the global marketplace.

This is a big deal because semiconductors are used in virtually all electronic products, and semiconductors are “reaching their limits” to power advanced technologies, including green tech like solar panels. By merely switching to WBG-enabled devices, we can immediately shrink our carbon footprint. WBG semiconductors will also improve the quality and reduce the cost of green energy products -- two necessary conditions to increase adoption of such technology and lower carbon emissions. It’s pretty exciting stuff!

ENERGY.GOV

ENERGY.GOV

We know WBG semiconductors have serious potential, and we’re using public-private partnership, investment, and innovation to push the limits, but how do we help ensure the efforts will help create jobs and prosperity for Americans? That’s where the Trans-Pacific Partnership (TPP) comes in. TPP will help take North Carolina’s homegrown efforts global by cutting tariffs on all U.S. manufactured goods, establishing strong IP protections for innovative, new products, like WBG semiconductors, and curbing foreign state-owned enterprises (SOEs) from undercutting American-made products in some of the fastest growing markets in the world.

TPP’s tariff-cuts double down on the cost-competitiveness of American WBG technology exports (thanks to UNC’s work), from electronics, machinery, high-tech instruments, and green goods. TPP provides additional benefits like heightened IP protection on patents and trade secrets ensuring American producers reap the rewards from their innovation. Also, TPP is the first trade agreement that prohibits state-owned enterprises (SOEs) from taking non-commercial action that discriminate against foreign competitors. This is a serious issue for the semiconductor industry, and TPP levels the playing field for U.S. manufacturers by curbing “trade distortions…[and] non-competitive behavior that advantages SOEs.”        

Most importantly, TPP expands access for Americans to sell WBG-enabled goods to markets in the Asia-Pacific, the largest and fastest-growing consumer market for electronic products in the world, making up over 30 percent of global sales in 2015. The region is also home to some of the fastest-developing economies in the world, and they will require large energy infrastructure investment in the coming years. With North Carolina’s leadership in WBG-semiconductor production and development and TPP’s export benefits, the U.S. is poised to meet that demand with quality, energy-efficient products.

TPP represents a significant opportunity to grow exports and more high-tech manufacturing jobs in the U.S. And if that wasn’t enough, imagine the impact of hundreds of millions of people reducing energy-use as developing economies transition to cleaner energy sources. This better future is within reach, and it’s yet another reason why Congress should take swift action and pass TPP.