Lawmakers propose 25% tax credit to incent domestic chip production

A group of bipartisan lawmakers from the Senate Finance Committee have which seeks to entice chipmakers to manufacture their silicon in the United States. Sponsored by from Oregon and Republican Mike Crapo of Idaho, among other committee members, the Facilitating American-Built Semiconductors Act would give companies a 25% tax credit when they invest in equipment and facilities domestic semiconductor manufacturing company.

According to the panel, up to 70 percent of the cost advantages offered by overseas chip foundries come from foreign subsidies. The proposed grant would be in addition to the $ 52 billion the Senate allocated last week as part of the . Since the start of the pandemic, chip shortages have affected various businesses, including automakers who have had to in some cases.

“The United States cannot allow foreign governments to continue to attract manufacturing companies abroad, increasing risks to our economy and costing American workers well-paying jobs,” said Senator Wyden.

According to Reuters, the tax credit would mainly benefit the Taiwanese company TSMC, which is building a . It would also help US chipmakers like Intel and Micron Technology. The first announced a in April to build two factories in Arizona. The panel has yet to share an estimate of the cost of the bill to taxpayers.

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