SEMI Endorses Legislation to Enhance Semiconductor Supplier Tax Benefits Under CHIPS Act

SEMI Supports New Legislation to Clarify Tax Credits for Semiconductor Suppliers

SEMI, a leading association for the semiconductor and electronics manufacturing industry, has publicly endorsed the Strengthening Essential Manufacturing and Industrial Investment Act, also known as the SEMI Investment Act. This significant piece of legislation aims to clarify the eligibility for tax incentives under Section 48D of the CHIPS and Science Act, ensuring that critical materials providers for semiconductor manufacturers can access essential tax credits.

Importance of the SEMI Investment Act

The SEMI Investment Act was introduced by a bipartisan group of senators, including Marsha Blackburn (R-Tenn.), Michael Bennet (D-Colo.), Thom Tillis (R-NC), and Chris Coons (D-Del.), in an effort to bolster the domestic semiconductor supply chain. Ajit Manocha, the President and CEO of SEMI, emphasized the necessity of this act by stating that materials manufacturing is just as vital as semiconductor production itself. He highlighted that these suppliers are crucial to meeting the growing global demand for advanced semiconductors that power artificial intelligence (AI) and other high-performance computing applications.

Manocha further expressed gratitude to the senators for their commitment to addressing the complexities surrounding the CHIPS Act. He mentioned, "The investment tax credit is a critical tool to accelerate construction of the semiconductor ecosystem in the United States and may be the most powerful incentive to onshore critical technologies powering the AI revolution."

What the Act Entails

The key aim of the SEMI Investment Act is to amend the Internal Revenue Code of 1986 to make it clear that the 48D Tax Credit encompasses materials essential for semiconductor manufacturing. The bill seeks to ensure that projects related to critical materials receive the same 25% investment tax credit that is currently available to semiconductor fabrication and equipment projects.

This change is critical for preventing significant companies from relocating overseas and ensuring that American manufacturers benefit from these incentives, as initially intended when the CHIPS and Science Act was enacted. SEMI expects that the clarity provided by this act will support the expansion of domestic manufacturing capacity and maintain the United States' edge in semiconductor technology.

Bipartisan Support for U.S. Semiconductor Industry

The SEMI Investment Act is expected to garner bipartisan support, underscoring its importance in enhancing the U.S. semiconductor industry, national security, and overall economic competitiveness. Ensuring that incentives remain available for the long-term is vital to match the extensive investment timelines associated with semiconductor manufacturing.

In conclusion, as the U.S. faces increasing competition in the technology sector, the introduction of the SEMI Investment Act represents an essential step towards strengthening the semiconductor supply chain, protecting American innovation and jobs, and leading the global technology landscape. SEMI is committed to collaborating with Congress to ensure the successful passage of this vital piece of legislation.

For more information about SEMI’s advocacy efforts and to stay updated on public policy developments affecting the semiconductor industry, visit SEMI Global Advocacy’s website. SEMI continues to connect over 3,000 member companies and 1.5 million professionals in the semiconductor and electronics manufacturing realm, driving collective solutions through collaboration, education, and innovation initiatives focused on growth and sustainability.

About SEMI

SEMI is the global industry association engaging a diverse network of stakeholders across the semiconductor supply chain. Through conferences, expos, and community initiatives, SEMI fosters innovation and collaboration that supports businesses’ growth while addressing key industry challenges. For further information, visit www.semi.org or connect with SEMI on LinkedIn and X.