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Lawmakers are proposing 25 percent tax credit to encourage domestic chip production

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A group of bipartisan legislators on the Senate Finance Committee have which seeks to encourage chip manufacturers to manufacture their silicon in the United States. It is sponsored of Oregon and Idaho Republican Mike Crapo, among others on the committee, the American-Built Semiconductors Act Facilitating Act will give businesses a 25 percent tax credit when they invest in equipment and national semiconductor manufacturing plants.

According to the panel, as much as 70 percent of the cost advantage offered by chip foundries abroad comes from the fund of foreign subsidies. The proposed subsidy will be in addition to the $ 52 billion the Senate allocated last week to part of the . Since the onset of the pandemic, chip shortages have affected a variety of different companies, including car manufacturers who have had in some cases.

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“The United States cannot allow foreign governments to continue to attract manufacturing companies overseas, increasing risks to our economy and costing U.S. workers well-paid jobs,” Senator Wyden said.

According to Reuters, the tax credit benefiting mainly TSMC from Taiwan, which is building a . It would also help American chip makers like Intel and Micron Technology. The former announced one in April to build two factories in Arizona. The panel also did not share an estimate of how much the bill will cost taxpayers.

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