Senate Approves Enhanced Tax Incentives for Semiconductor Manufacturers
This semiconductor initiative is part of a hefty nearly 900-page bill central to President Trump’s economic strategy. The House is now gearing up to discuss this legislation,aiming for it to be signed into law by Independence Day.
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The enhanced tax credit builds on incentives established under the bipartisan Chips and Science Act of 2022, which was signed into law by President Biden. This program also allocates $39 billion in grants and potentially $75 billion in loans aimed at revitalizing American semiconductor manufacturing after years of offshoring production primarily to Asia.
This uncapped tax credit could end up being more expensive than other subsidy forms due to its potential impact on investments spurred by the Chips Act. It’s expected that this will represent a significant portion of incentives awarded even beyond those companies receiving grant funding—Intel, TSMC, Micron, and Samsung Electronics are among those likely benefiting most from these programs.
If companies kick off projects before next year’s close date can still claim credits as long as construction continues afterward—a strategy designed not only to initiate projects but also acknowledge that building chip factories can take several years!
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