In 2020, the Trump administration and Congress highlighted the national and economic security importance of a strong domestic semiconductor manufacturing ecosystem. This emphasis on this strategic sector ultimately resulted in development and authorization of the CHIPS Act later that year. The goals of the bill aimed to strengthen domestic semiconductor research, design, and manufacturing; fortify our economy and national security; and reinforce America’s chip supply chains. Subsequently, in July 2022, Congress passed the legislation to provide semiconductor manufacturing grants and investment tax credits, alongside chip R&D investments
These incentives have sparked well over on half-a-trillion dollars in announced private sector investments in the American chip ecosystem across the entire supply chain, including logic, memory, analog, advanced packaging, mature-node, leading-edge, materials, and equipment. As a result, the U.S. is expected to triple its semiconductor manufacturing capacity (203%) from 2022 to 2032, the highest growth rate in the world.
This trajectory is at risk, however, as global competitors implement policies to attract chip companies and the advanced manufacturing investment tax credit (Section 48D) is set to expire in 2026. To uphold this strong trendline and help America compete globally, Congress and the administration should effectively implement existing incentives, as well as extend the manufacturing tax credit to ensure the U.S. remains an attractive destination to invest, expand, and modernize facilities for decades to come. Likewise, policymakers should expand the credit to include chip research and design, which will ensure the next generation of technology is innovated in America and made in America.
One-Pager: STAR Act (H.R. 802)>
Two-Pager: America’s Chip Resurgence>
The semiconductor industry directly employs nearly 338,000 people in America and supports more than 1.9 million additional jobs throughout the U.S. economy. With bold greater federal investment in domestic chip manufacturing and research, our economic impact would be even greater.
