Obama Delivers Unique State-of-the-Union Speech

SEMI’s priorities are addressed throughout the speech.


By Jamie Girard

On Jan. 12, President Obama delivered his eighth and final State of the Union Address to the nation. The speech is closely watch by many to signal the intent of the commander-in-chief for the coming year, but this time President Obama broke from tradition in focusing grander themes rather that specific programs. While it was decidedly a different approach to the normal laundry list of items a President rolls out to start the year, there were some interesting takeaways for the semiconductor industry in particular, and high tech overall.

The President set the stage for the rest of his speech saying, “…we live in a time of extraordinary change — change that’s reshaping the way we live, the way we work, our planet, our place in the world….” Such sentiment is applicable to SEMI members as they work to continue to help create change in the world through product innovation. At the same time, there is an ongoing shift in the way that the industry operates, as it meets new challenges which are both technical and financial. As countries like China ramp up their investment in the industry, it certainly creates both challenges and opportunities for companies from other parts of the world, and leads to some consternation from countries with long-established leadership positions.

Feeling this pressure from other countries, and from a sense of despair from within our own, President Obama posited, “How do we reignite that spirit of innovation to meet our biggest challenges?” He goes on to specifically lift up high tech as an example when he said, “… that spirit of discovery is in our DNA…America is every immigrant and entrepreneur from Boston to Austin to Silicon Valley, racing to shape a better world.”

Although the sentiment for American ingenuity is in the right place, in today’s world companies make decisions that go far beyond the notion of embracing the “spirit of discovery.” While the U.S. took a big step forward in December by making the Research & Development Tax credit permanent in December 2015, it still has a long way to go to make the overall tax code competitive with the rest of the world. America’s 35% corporate tax rate is the highest in the industrialized world. It’s not the only factor companies take into consideration when making investment decisions, but it certainly doesn’t help that the U.S. lags so far behind it’s competitors.

With this global competition in mind, President Obama also used the speech to push for what may be his signature foreign policy achievement, the Trans-Pacific Partnership (TPP). TPP is a 12-nation agreement of Pacific Rim nations, including the United States, but excluding China that represents 40% of the world’s economy. Obama said, “…[TPP] cuts 18,000 taxes on products made in America, which will then support more good jobs here in America. With TPP, China does not set the rules in that region; we do. You want to show our strength in this new century? Approve this agreement. Give us the tools to enforce it.”

Our industry is no doubt a global one. With this in mind, SEMI has supported efforts for the member nations of TPP to come to an agreement. SEMI will continue to work with policymakers and like-minded industry associates to push for the passage of TPP in 2016.

In competing globally for innovation, the President touted his administration’s work in launching “next-generation manufacturing hubs.” This refers to the National Network for Manufacturing Innovation (NNMI) program with which many SEMI members have been engaged. The NNMI is a public-private partnership model that brings federal dollars to be matched with private funds to attempt to catalyze more innovations into commercialized products. SEMI is a supporter of a few of the seven such centers that have been stood up around the country, including the flexible hybrid electronics center NextFlex.

The U.S. Presidential election is in full swing, which makes for a notoriously difficult climate in Washington, D.C. While President Obama offered his vision for the future, it’s imperative that SEMI and its members work with members of both parties to push for the kinds of polices we as an industry need most. SEMI member involvement is critical to this mission. If you’d like to know how to be involved with SEMI in Washington, D.C., please contact Jamie Girard, senior director, Public Policy, SEMI at [email protected]

Jamie GRAPHIC Capitol shutterstock_75579604

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