Key Public Policy Priorities

International Trade Agreements

TI derives over eighty percent of its revenues from sales in overseas markets. Free trade agreements make it possible for TI to manufacture and design in the U.S. and still have access to key markets in other countries. TI continues to benefit from U.S. leadership in removing tariffs on information technology through agreements such as the Information Technology Agreement and the agreement on Multichip Packages. These agreements would not be possible without the existence of Trade Promotion Authority. TI supports advancing the Free Trade Agreements (FTAs) currently under negotiation or awaiting Congressional approval. In the multilateral context, TI has benefited from China’s accession to the World Trade Organization (WTO). China has reduced tariffs on semiconductors and removed other barriers to their market. TI continues to be engaged in new issues of China’s compliance with its WTO obligations as they arise. TI supports the expansion of WTO commitments through the Doha Round of negotiations.

Export Controls

TI, like all other U.S. semiconductor companies, is subject to a set of U.S. Government regulations which govern the export of semiconductors, equipment, and technology to particular countries and to citizens of certain countries. TI has a strong compliance function that ensures TI does its part to protect national security concerns. However, in conjunction with compliance activities, TI also provides an important contribution to revising existing regulations and to shaping new regulations. U.S. regulations can become outdated or may need to be streamlined. TI has been very active in advising the Department of Commerce on the deemed export rule, control levels applied to microprocessors and generally on export controls as they apply to a key market, e.g., China.

Telecommunications Policy

Wireless

TI is a leading global supplier of GSM and W-CDMA chipsets to mobile handset and base station manufacturers. As such, the company supports efforts to identify and make available additional radiofrequency spectrum for the deployment of 3G mobile technologies. Ideally, such spectrum should be common among regions of the world. TI supports technology neutrality – allowing service providers, not government regulators, to determine which technology to deploy.

Digital Rights Management

TI is a key technology provider for consumer products that allow users to view or listen to protected content. TI supports the principle of fair use for consumers and has opposed efforts to curtail fair use or to impose technology mandates on technology providers.

Patent Reform

The House has passed and the Senate is considering legislation that would significantly alter U.S. patent law (H.R. 1908; S. 1145). TI has a strong patent portfolio resulting from significant investment in R&D, and is concerned about the negative effects of the proposed legislation on genuine innovators like TI.

The proposed legislation would dramatically alter the procedure for calculating damages, which would minimize awards and encourage infringement. The bill’s changes to venue rules would distort the system in favor of defendants and create backlogs in key districts.

Further, since legislation was first proposed in 2005, the legal landscape for patent rights has changed dramatically, with a number of Supreme Court and Federal Circuit cases curtailing a perceived imbalance in favor of patent holders.

A number of stakeholders, including biotechnology, nanotechnology, venture capital, manufacturing, pharmaceutical, and universities have raised concerns with the proposed legislation. TI believes that these concerns must be resolved before Senate passage. Any patent reform legislation should protect the rights of patent holders in a broad range of innovative sectors.

Competitiveness

The ability for the U.S. to remain the world’s innovation leader is a top public policy priority for TI. The critical components to the future competitiveness of the U.S. semiconductor industry and our nation are: increased investments in basic research, improvements in math/science education, and access to and retention of the world’s brightest minds. TI supports the Administration’s American Competitiveness Initiative (ACI), the House Democratic Innovation Agenda, and the bipartisan AmericaCOMPETES legislation signed in August 2007 to address these issues.

The Semiconductor Industry Association has launched the “Choose to Compete” campaign (www.choosetocompete.org) that outlines policy recommendations to maintain U.S. competitiveness in the industry.

Basic Research Funding

Basic research at U.S. universities is key to addressing national challenges such as energy, security, and medical advances. TI supports increased federal funding for basic research, especially in the physical sciences and engineering. University research laboratories need sufficient funding to attract the best and brightest professors and students in the fields of engineering, physics, chemistry and other technology areas. TI advocates for increased appropriations for the National Science Foundation (NSF) and National Institute of Standards and Technology (NIST) and to achieve the goal of doubling basic research in the physical sciences and engineering at NSF and NIST as is outlined in the ACI and AmericaCOMPETES. TI supports full funding of the university-based Focus Center Research Program, a partnership of the semiconductor industry and the Department of Defense that investigates the key technical challenges identified in extending CMOS. TI urges Congress to reauthorize the National Nanotechnology Act, with specific mention of the challenge of nanoelectronics. TI believes that investments in basic research are critical to maintaining U.S. technological leadership, and essential to increasing the pool of highly-educated individuals in technical fields in the United States.

Immigration

Science and engineering professionals are essential to TI's growth and success. Most graduates from U.S. advanced degree programs in technical fields are foreign nationals. TI supports reforming immigration policy to facilitate the ability to hire and retain highly educated individuals in sufficient numbers to meet our workforce needs. In particular, individuals with advanced degrees in science, technology, engineering, and mathematics are critical to U.S. competitiveness, and should be given priority for permanent resident status. TI opposes legislation that places unnecessary burdens on employers.

Education

TI's success depends on a well-qualified workforce. Yet finding and retaining technically skilled employees is an increasing challenge for all high tech firms. TI is actively engaged with federal, state and local governments to promote educational excellence at all grade levels. For example, at the K-12 level, TI actively supports initiatives to increase focus on math and science proficiency. This support is consistent with TI’s support for federal, state and local programs designed to improve math and science teaching and student performance. In addition, TI supported the No Child Left Behind Act, and supports reauthorization of the legislation with an emphasis on high standards and accountability for student achievement.

At the university level, TI actively supports the industry/university consortium, the Texas Engineering and Technical Consortium, that directs federal, state, and private dollars to programs to increase the enrollment and retention of electrical engineers and computer science majors from Texas colleges and universities.

Tax Issues

R&D Tax Credit

TI supports federal and state tax policies that support and encourage research and development. The R&D Tax Credit is TI’s single most critical legislative tax issue which has been renewed and then allowed to lapse several times since it was first introduced in 1987. TI has been working through its associations and the R&D Tax Credit Coalition to improve the credit and make it permanent so that the perennial effort to renew it can be shelved.

Tax Reform

Tax reform was last addressed in major legislation in 1987. In the intervening time, many proposals have been made but overall reform of corporate taxes has not occurred. TI closely monitors the issue and participates in the public policy debates where appropriate. The U.S.’s 39% combined federal and state corporate tax rate is the second highest among OECD countries. This puts the U.S. at a clear disadvantage in global competition with other countries where the rates are lower and incentives like the R&D Tax Credit are higher.

Radio Frequency Identification (RFid)

TI is a leading supplier of RFID, both for retail supply chain applications and also for use in secure contactless payments. TI has developed a secure solution for identity documents such as e-passports. TI has worked with other interested parties to achieve balanced legislation at the state level.

Environment, Safety and Health

TI has a strong record of commitment to worker safety, assuring a safe workplace and being a responsible steward of the environment. A good example of that objective is the sustainable design of TI’s new RFAB. In the legislative and regulatory area, TI works to promote laws that are well-informed and responsible and discourage those that place undue burdens on the company’s operations. With the increasingly assertive regulatory approach of the European Union and some Asian countries, TI must also monitor and seek to influence environmental regulations around the world.

Human Resources

The overall goal is to help TI offer policies that provide TI the greatest flexibility in health and retirement benefits and offer the best, most cost-effective protection for TI employees. TI’s particular focus involves promoting greater consumerism in health care, managing burdensome regulations and high costs associated with retiree health care and promoting health IT to drive increased safety, efficiency, accountability and quality of care.

Government Relations