The "Semiconductor Sovereignty Act" mandates the Secretary of Commerce to conduct and submit detailed reports on the state of semiconductor manufacturing and research. These reports, to be prepared through the Under Secretary of Commerce for Industry and Security, aim to provide a strategic overview of the industry. The initial report is due within 240 days of enactment, and subsequent reports will be submitted annually.

The initial report requires identifying critical and foundational inputs for semiconductors, including manufacturing tools, processes, minerals, gases, and their supply chains. It also necessitates an analysis of offshoring and reshoring trends since 1990, including partnerships and investments by domestic and foreign entities. Furthermore, the report must examine the role of foreign nationals and American officials working for foreign entities, and the acquisition of domestic assets, including intellectual property, by foreign entities.

A key component of the initial report is an assessment of the implications of offshore manufacturing and research on the national economy, national security, U.S. supply chains, and relationships with allies, adversaries, and geopolitically vulnerable markets like Taiwan. Based on these findings, the Secretary must identify and recommend strategies. These strategies include disincentivizing offshoring, increasing domestic manufacturing and research through incentives like tax breaks and subsidies, and strengthening U.S. long-term competitiveness.

The bill also calls for strategies to enhance governmental oversight and reduce the acquisition of domestic semiconductor assets by foreign entities. Annually, the Secretary must determine if the previously submitted strategies are outdated and, if so, provide updated recommendations to Congress and publish them in the Federal Register. The Secretary is required to consult with other federal agencies in carrying out these duties, ensuring a comprehensive governmental approach to semiconductor sovereignty.