[News] U.S. Senate Proposes 30% Chip Tax Credit Despite Trump’s CHIPS Act Repeal Push

According to Bloomberg, the Senate’s draft tax bill proposes a temporary boost to the investment tax credit for semiconductor manufacturers—raising it from 25% to 30% of plant investments. The measure is aimed at encouraging chipmakers to ramp up spending on new facilities before the credit expires at the end of 2026, the report notes.

As mentioned by Bloomberg, senators aim to deliver the tax bill to President Trump by the July 4 holiday. The legislation is expected to see revisions in the Senate before a floor vote, and it must also clear the House before becoming law.

Tax Credits as Core Benefit of CHIPS Act

Bloomberg points out that the tax credit is also a key component of the CHIPS and Science Act, signed by President Joe Biden in 2022. While the CHIPS Act provided $39 billion in grants and up to $75 billion in loans, the report highlights that its most valuable benefit was a 25% tax credit for qualifying projects.

Major CHIPS Act recipients include Intel, TSMC, Samsung, and Micron. Bloomberg notes that for most companies, tax credits make up the largest share of their incentives.

However, Trump has pushed to repeal the CHIPS Act, even though lawmakers from both parties have shown little interest in scrapping subsidies that support high-paying jobs in their districts, according to Bloomberg.

Trump Seeks to Renegotiate CHIPS Act Deals

As part of Trump’s effort to repeal the CHIPS Act, according to Reuters, U.S. Commerce Secretary Howard Lutnick said the administration is reviewing certain semiconductor grants issued under former President Joe Biden, suggesting some awards could be revoked.

As the report indicates, Lutnick noted that some Biden-era grants “just seemed overly generous” and confirmed the administration is working to renegotiate them in order to better serve American taxpayers. Notably, he cited TSMC as a successful example, highlighting that the chipmaker raised its original U.S. investment commitment from $65 billion to $165 billion.

In March, President Trump urged lawmakers to repeal the CHIPS and Science Act, which has raised concerns about whether Intel will receive the remaining funds needed for its Ohio investment. Intel has so far received USD 2.2 billion of its approved USD 7.865 billion in CHIPS Act funding, with at least USD 1.5 billion allocated to its New Albany project in Ohio, The Columbus Dispatch indicates.

Read more

• [News] Trump Administration Reportedly Reconsiders CHIPS Act Subsidies, Touts TSMC as Model
• [News] CHIPS Act Repeal Could Slash U.S. Semiconductor Market Share to Single Digits

(Photo credit: The White House)