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US government to give leading foundry makers 25 per cent tax credit

by on07 September 2022

Makes $10,000 student loan forgiveness look like small change

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.

The document shows the department's plans for dividing 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 US is responsible for only 10 per cent of global chip capacity and just three  per cent of global packaging, assembling, and testing services, despite being the leader in technology.

That is mostly because chip makers found it much cheaper to make their products away from the US. 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.

Any company, foreign or domestic, that takes steps to advance the commerce departments goals, with the exception of "entities of concern" will get the cash.

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.


Last modified on 07 September 2022
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