Federal legislation would invest in semiconductor chips

Bipartisan legislation recently introduced in the U.S. House of Representatives would create long-term investment in designing and manufacturing semiconductor chips in the United States.

The Facilitating American-Built Semiconductors Act would provide semiconductor companies a 25 percent refundable investment tax credit (RITC) to invest in manufacturing. The credit could be used to cover the costs of purchasing semiconductor manufacturing equipment that would produce the chips or constructing a semiconductor manufacturing facility.

The bill also would provide a 25 percent RITC for companies investing in semiconductors research and design.

“Building semiconductor chips here in America strengthens the U.S. supply chain, lessens our reliance on foreign products, and creates more jobs here at home,” U.S. Rep. Mike Kelly (R-PA), House Auto Caucus co-chairman, said. “The auto industry — heavily reliant on semiconductor chips — has been the heart and soul of America for over a century. This pro-growth legislation is a win-win and will help to ensure that can continue for the next century to come.”

Semiconductor chips are used in many electronics, including smartphones, vehicles, advanced weapons systems, and other technology. Most semiconductors used in the United States are manufactured in foreign countries.

China provides incentives to attract semiconductor companies.