Crapo, Wyden Introduce Bill To Boost Domestic Manufacturing Of Semiconductors
Bill would create a 25 percent investment tax credit
Washington, D.C.--Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) and Committee Chairman Ron Wyden (D-Oregon) today introduced legislation to strengthen U.S. semiconductor supply chains by incentivizing domestic manufacturing of this critical technology.
The Facilitating American-Built Semiconductors (FABS) Act is cosponsored by Senators John Cornyn (R-Texas), Mark Warner (D-Virginia), Steve Daines (R-Montana) and Debbie Stabenow (D-Michigan).
The share of global semiconductor production in the United States has dropped from 37 percent in 1990 to just 12 percent today. Semiconductor production is increasingly 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, rather than comparative advantages. The legislation would close that gap by incentivizing production of semiconductors in the United States.
“Helping American semiconductor manufacturers strengthen their supply chains to better protect critical technologies is a longstanding bipartisan effort,” said Crapo. “Senators Cornyn and Warner have been strong leaders in the fight to stimulate domestic advanced chip manufacturing, and their partnership is instrumental in this effort. Leveraging federal government incentives to bolster American companies and bring chip and semiconductor manufacturing back to the United States is critical. This tax incentive is a great step toward our goal of fortifying our supply chains, strengthening national security and boosting economic competitiveness.”
“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,” said Wyden. “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.”
Micron Technology, Inc. added, “Micron applauds the introduction of the FABS Act, legislation that would further promote U.S. leadership in the semiconductor industry. These continued investments in America’s future would further enhance our nation’s competitiveness on a global scale, accelerate innovation and bolster technology leadership and economic growth in the U.S. We appreciate the leadership efforts of Chairman Wyden, Ranking Member Crapo and Senators Cornyn, Warner, Daines and Stabenow to incentivize more innovation, manufacturing and R&D here in the U.S. and restore America’s technological leadership in such a vital industry.”
The legislation would create a 25 percent investment tax credit for investments in semiconductor manufacturing, both for manufacturing equipment and the construction of semiconductor manufacturing facilities. The proposal includes incentives for the manufacturing of semiconductors, as well as for the manufacturing of the specialized tooling equipment required in the semiconductor manufacturing process.
Taxpayers could elect to receive the tax credit as a direct payment, and must make this election before their facility or equipment is placed in service. To provide certainty and predictability for taxpayers, the credit would be permanent.
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