U.S. Sens. Ron Wyden (D-OR) and Mike Crapo (R-ID) introduced a bill to provide incentives for manufacturers in the U.S. semiconductor industry.
The share of global semiconductor production in the United States has dropped to 12 percent from 37 percent in 1990. Semiconductor production is now concentrated overseas, with 75 percent of global production now in East Asia. As much as 70 percent of the cost difference for producing semiconductors overseas is driven by foreign subsidies.
The Facilitating American-Built Semiconductors (FABS) Act would help close that gap by incentivizing the production of semiconductors in the United States.
“Chips are a critical technology in our economy, as recent supply chain disruptions and shortages have made crystal clear. The supply of everything from computers to cars is affected by these shortages, and the way to fix this problem is to bring chip manufacturing back to the United States,” Wyden said. “Our bill would provide a significant investment tax credit to companies that build chips here at home, rather than overseas. The United States can’t allow foreign governments to continue to lure companies’ manufacturing overseas, increasing risks to our economy and costing American workers good-paying jobs. We look forward to working with our colleagues to get this done.”
The bill would create a 25 percent investment tax credit for investments in semiconductor manufacturing, both for manufacturing equipment and the construction of semiconductor manufacturing facilities. Further, it includes incentives for the manufacturing of semiconductors, as well as for the manufacturing of the specialized tooling equipment required in the semiconductor manufacturing process. The tax credit would be permanent.
“Helping American semiconductor manufacturers strengthen their supply chains to better protect critical technologies is a longstanding, bipartisan effort,” Crapo said. “Senators Cornyn and Warner have been strong leaders in the fight to stimulate domestic advanced chip manufacturing, and I appreciate their partnership in this effort. It is critical that we leverage federal government incentives to bolster American companies and bring chip and semiconductor manufacturing back to the United States. This tax incentive is a great step toward our goal of fortifying our supply chains, strengthening national security, and boosting economic competitiveness.”