October 5, 2001 - Washington, DC - Semiconductor Equipment and Materials International (SEMI) called on Congress to support accelerated depreciation for high-tech manufacturing equipment as part of the economic stimulus package announced by President Bush this week.
Current US tax law only allows for depreciation of equipment over five years, more than twice as long as the 18 to 24 month useful life of most advanced semiconductor manufacturing equipment. Including accelerated depreciation as part of the economic stimulus package would provide chipmakers with additional incentive to invest, rapidly replace equipment with advanced technology, and more closely align depreciation schedules with the actual economic and technology life of the equipment.
"Investment in new manufacturing equipment and technologies is critical to semiconductor device makers as they strive to keep pace with rapidly advancing chip designs and the needs of the global electronics industries," said Stan Myers, president and CEO of SEMI. "During economic downturns such as the industry is facing now, chipmakers are unable to fully invest in new equipment which in turn has a severe financial impact on the companies that supply these critical technologies."
The global semiconductor and semiconductor equipment industries are currently in the worst economic downturn in their collective history, with both industries facing declines in sales of more than 30% in 2001. Severe cutbacks in capital spending by semiconductor chipmakers have rippled throughout the supply chain, causing many equipment manufacturers to make dramatic cuts in new investments and in their workforce.
"Accelerated depreciation of manufacturing equipment is exactly the kind of tax incentive that is needed now because it will immediately spur new investment and create new opportunities for American workers," said Bobby Greenberg, president of SEMI North America. "Increased demand for semiconductor equipment will stimulate manufacturing and related industries, which will translate into more jobs, and that will put more money back into our economy."