US moves to extend semiconductor tax credit to 2031 for suppliers
US lawmakers have introduced a bill to extend tax incentives for the semiconductor manufacturing sector, with a specific focus on supporting critical materials suppliers. The Strengthening Essential Manufacturing and Industrial Investment Act, known as the SEMI Investment Act, has been presented in the House of Representatives by Brian Fitzpatrick and Brendan Boyle.
Tax credit extension
The SEMI Investment Act would prolong the Advanced Manufacturing Investment Tax Credit to 2031. This incentive, which was initially established under the CHIPS and Science Act, is currently set to expire in 2026. The legislative move is designed to provide long-term certainty for semiconductor manufacturers considering significant capital commitments in the United States.
Scope widened
One of the notable features of the proposed act is the clarification that critical materials suppliers within the semiconductor industry would also be eligible for the tax credit. The sector has highlighted the importance of including suppliers of foundational materials, arguing this is necessary to ensure supply chain stability and to encourage domestic manufacturing growth.
Supply chain concerns
Recent disruptions and geopolitical tensions have underscored the vulnerability of global semiconductor supply chains. Industry groups have warned that without incentives across every stage of production-from raw materials through to end products-the US risks falling behind in technological capacity and economic resilience.
Industry support
The SEMI industry association, which represents companies across the semiconductor and electronics supply chain, has expressed strong support for the act. The group pointed to the significance of retaining high-skilled jobs and attracting further capital investment to the United States.
"Ensuring a strong and secure domestic semiconductor ecosystem in the United States requires sustained investment across the entire semiconductor supply chain," said Joe Stockunas, President, SEMI Americas. "The SEMI Investment Act extends the tax credit beyond 2026 and expands it to materials manufacturing projects that will help ensure that the good-paying jobs that accompany these critical projects stay in the United States. We are deeply grateful to Representatives Fitzpatrick and Boyle for introducing this critical legislation in the House of Representatives."
Strategic industries
The growth of the US semiconductor sector has become increasingly important with advances in artificial intelligence, telecommunications, and bioengineering. Each of these areas relies on a robust and secure supply of semiconductors and fundamental materials.
The financial requirements for chip manufacturing remain significant, often involving upfront investments measured in billions. To maintain and increase the US share of global semiconductor manufacturing, policymakers have sought to make the domestic environment more attractive through targeted tax credits and other types of support.
SEMI has called for continued cooperation between the legislative and executive branches to secure the future of the domestic semiconductor sector.
"SEMI looks forward to working with Congress and the Trump Administration to extend and expand the Section 48D tax credit to ensure the continued growth of the semiconductor ecosystem in the United States," said Stockunas. "The U.S. semiconductor market is growing to meet the needs of critical technologies such as artificial intelligence (AI), telecommunications, and bioengineering. That growth requires billions in upfront investment, and tax incentives are essential to strengthening domestic manufacturing and innovation."
