US Wants To Give Global Chipmakers a 25% Tax Credit On New Fabs

Leading foundry operators stand to benefit from a 25 percent investment tax credit (ITC) on domestic fab projects, according to a document published by the US Department of Commerce this week. The Register reports: The document [PDF] sheds new light on the department's plans for divvying up the more than $50 billion CHIPS Act fund approved this year by Congress to fund domestic chip production. The tax credits accompany $39 billion in grants, cooperative agreements, loans, and loan guarantees are available to companies working to advance US semiconductor and supply chain security interests. The Commerce Department appears to have mixed sentiments about the state of the US in the global semiconductor sphere. The document argues the US remains the world leader in chip design and native design and automation tools but also notes the US is responsible for only 10 percent of global chip capacity and just 3 percent of global packaging, assembling, and testing services, pointing to areas where America has fallen behind when it comes to domestic production. The department adds that recent advancements made by the People's Republic of China to accelerate their own domestic chip manufacturing capacity has only served to exacerbate the risk to US supply chains. With that said, the Commerce Department isn't being picky about which companies are eligible for funding. Any company, foreign or domestic, that takes steps to advance the commerce departments goals, with the exception of "entities of concern." Those goals in include accelerating leading-edge and legacy chip production in the US, research and development into next-generation semiconductor applications, and efforts to develop an adequate workforce to fuel this expansion. While foreign manufacturers aren't excluded from receiving funding, the Commerce Department emphasizes that those funds must go towards domestic infrastructure and can't be used abroad.

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