US Senate passed a tax bill that boosts incentives for domestic semiconductor manufacturing, strengthening efforts to revitalise the US chip industry.
The legislation raises the investment tax credit for chipmakers to 35% from 25%, surpassing the 30% increase proposed in an earlier draft, as reported by Bloomberg.
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Companies including Intel, Taiwan Semiconductor Manufacturing Company (TSMC) and Micron Technology, could likely benefit from the bill.
This move aims to bolster domestic semiconductor production, with the new credit applicable for projects initiated before the 2026 deadline.
It is part of a comprehensive 900-page bill central to President Donald Trump’s economic agenda.
The House is expected to review the legislation with the aim of forwarding it to Trump by 4 July 2025.
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By GlobalDataThe increased credit builds on the 2022 Chips and Science Act, which also offers $39bn in grants and up to $75bn in loans for manufacturing projects.
The uncapped tax credit is anticipated to be more costly than other subsidies, reflecting the substantial investments spurred by the Chips Act.
It is expected to be the primary incentive for companies, including those not receiving grant awards.
Despite President Trump’s earlier call to repeal the Chips Act, bipartisan support remains strong due to the high-paying jobs and national security importance of the sector.
The Commerce Department continues to manage the grant programme, advocating for larger investments and revising award terms.
President Trump’s administration has reported increased investment commitments from TSMC, Micron, and GlobalFoundries, which the White House cites as evidence of successful policies.
Although these did not include additional Chips Act grants, increased company spending could lead to more tax credits, especially if the Senate bill becomes law.
Projects started by the end of next year can claim credits for ongoing construction, encouraging timely project initiation while acknowledging the lengthy construction period for chip factories.
