US Senate passes tax bill to increase incentives for chip industry

From Yahoo Finance: 2025-07-03 12:01:00

The US Senate passed a tax bill boosting incentives for domestic semiconductor manufacturing, increasing the investment tax credit for chipmakers to 35% from 25%. Companies like Intel, TSMC, and Micron could benefit from this move to revitalize the chip industry by 2026. The House aims to forward the bill to President Trump by 4 July 2025 as part of his economic agenda.

The legislation builds on the 2022 Chips and Science Act, offering $39bn in grants and up to $75bn in loans for chip manufacturing projects. The uncapped tax credit is expected to be more costly but a primary incentive for companies, even those not receiving grant awards. Despite Trump’s initial opposition, bipartisan support is strong due to the sector’s high-paying jobs and national security importance.

The Commerce Department manages the grant program to advocate for larger investments in semiconductor production. President Trump’s administration notes increased investment commitments from major companies like TSMC, Micron, and GlobalFoundries, citing them as proof of successful policies. Increased spending could lead to more tax credits, particularly if the Senate bill becomes law.

Overall, the tax bill aims to bolster domestic semiconductor manufacturing, providing incentives for companies to invest in chip production. The legislation reflects efforts to revitalize the US chip industry, with bipartisan support due to the sector’s economic and national security significance.



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