Semiconductor Investment Gets a Boost with Expanded Tax Credit
Washington D.C. – July 5, 2025 – The U.S. House of Representatives has approved a significant increase to the advanced manufacturing investment credit (AMIC) for the semiconductor industry, raising it from 25% to 35%. This action builds upon recent finalized regulations from the U.S. Department of the Treasury establishing a 25% tax credit for qualifying semiconductor manufacturing investments. The move is expected to further incentivize domestic chip production and strengthen the nation’s position in the global semiconductor market.
The legislation stipulates that construction on projects claiming the credit must have commenced after August 9, 2022, with equipment being put into service after December 31, 2022. This timeline aims to accelerate the impact of the incentive, encouraging immediate investment and expansion within the sector.
Industry Leaders Applaud the Expansion
John Neuffer, CEO and President of the semiconductor Industry Association (SIA), expressed strong support for the enhanced credit.He highlighted the initial 25% credit’s success in stimulating private investment across the American semiconductor supply chain, projecting a more than threefold increase in domestic chip manufacturing capacity by 2032. Neuffer believes the expanded 35% credit will further bolster the domestic chip ecosystem and enhance U.S.global competitiveness.
Did You Know? The semiconductor industry is a cornerstone of modern technology, powering everything from smartphones and computers to automobiles and defense systems.
The bill also incorporates additional provisions championed by the SIA, including a permanent modification to the deduction for foreign-derived intangible income and the reinstatement of full deductibility for domestic research and development (R&D) expenditures. These measures are designed to foster innovation and encourage continued investment in cutting-edge semiconductor technologies.
Understanding the Semiconductor Landscape
Semiconductors,as defined by experts,are materials possessing electrical conductivity levels between those of conductors and insulators. their unique properties allow for precise control of electrical flow, making them essential components in modern electronics. The ability to modify a semiconductor’s conductivity through a process called “doping” – introducing impurities into its crystalline structure – is essential to creating the diverse range of electronic devices we rely on daily.
Pro Tip: Staying informed about semiconductor industry developments is crucial for investors and technology enthusiasts alike. Resources like the SIA website (https://www.semiconductors.org/) provide valuable insights.
Here’s a quick comparison of the AMIC changes:
| Feature | Previous Credit | New Credit |
|---|---|---|
| Credit Percentage |
