Happy July 1st everyone! Great to see you back here at FabBlog. In early June, Senators Cornyn (R-Texas), Warner (D-Va.), Risch (R-Idaho), Sinema (D-Ariz.), and Rubio (R-Fla.) and Representatives Matsui (D-Calif.) and McCaul (R-Texas) introduced the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act to Congress, which aims to bring semiconductor manufacturing and innovation back to American soil. Just in time for the Fourth of July, too. I can’t think of a single better way to express your patriotism than bringing chip manufacturing back to the states.
Although the United States leads in designing chips, most of the manufacturing still occurs outside of the country. Currently, “there are commercial fabs in 18 states, and semiconductors rank as our nation’s fifth-largest export.” However, in many other countries there are “significant semiconductor manufacturing incentives” put in place, leading to massive semiconductor manufacturing growth abroad. Comparatively, America’s absence of motivation contributes to the low levels of semiconductor manufacturing growth. This bill hopes to combat the lack of motivation to manufacture chips in the United States by allocating tens of billions in research initiatives and incentives over the span of the next 5 to 10 years.
Under this proposed act, there will be the introduction of a 40-percent refundable tax credit for qualified semiconductor equipment put in place through year 2024. From there, it will decrease to 30-percent in 2025, 20-percent in 2026 and eventually phase out in 2027. Because semiconductor manufacturing is so expensive, these incentives will hopefully boost the amount of chip manufacturing in America.
We are eager to see how this bill plays out in Congress and the possible impacts it could have on our industry. Let us know what you think of this bill by commenting below!
(1) Ravi, Sarah. “CHIPS for America Act Would Strengthen U.S. Semiconductor Manufacturing, Innovation.” Semiconductor Industry Association, 11 June 2020, www.semiconductors.org/chips-for-america-act-would-strengthen-u-s-semiconductor-manufacturing-innovation/.
(2) “Bipartisan, Bicameral Bill Will Help Bring Production of Semiconductors, Critical to National Security, Back to U.S.” Mark R. Warner, 10 June 2020, www.warner.senate.gov/public/index.cfm/2020/6/bipartisan-bicameral-bill-will-help-bring-production-of-semiconductors-critical-to-national-security-back-to-u-s.