Trump Tax Bill to Boost Biden’s Chip Tax Credit to 30%

The Senate’s draft tax bill calls for increasing an investment credit for semiconductor manufacturers, a potential boon for chipmakers that the Trump administration is urging to increase the size of their US projects.

The measure would increase the tax credit to 30% of investments in plants, up from 25%, giving chipmakers further incentive to break ground on new facilities before an existing 2026 deadline. Companies that start projects by the end of next year can continue to claim credits for continuous construction after that date — a policy that’s designed to get sites up and running while recognizing that chip factories take years to build.

The tax credit is one of the key incentives on offer from the 2022 Chips and Science Act, a bipartisan law that was a pillar of President Joe Biden’s domestic policy. The program also includes $39 billion in grants and up to $75 billion in loans for manufacturing projects, designed to boost the American semiconductor industry after decades of production shifting to Asia.

The tax credit, which isn’t capped, was already likely to be costlier than those other forms of subsidies — a function of how much investment the Chips Act has spurred. In almost every case, it will account for the greatest share of Chips Act incentives going to any one company, including those that didn’t win grant awards. Major beneficiaries of the grant program include Intel Corp., Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Micron Technology Inc.

President Donald Trump earlier this year called for repealing the Chips Act, but lawmakers in both parties have shown little desire to eliminate subsidies that provide high-paying jobs in their districts, in a sector seen as critical to national security. The Commerce Department, meanwhile, has continued to implement the grant program — while urging larger investments and reworking terms of awards that took months to negotiate. “We’re getting more value for the same dollars,” Commerce Secretary Howard Lutnick said this month.