The U.S. Department of the Treasury, in conjunction with the Internal Revenue Service (IRS), has issued final regulations for the Advanced Manufacturing Investment Credit (CHIPS ITC) under the Biden-Harris Administration’s CHIPS and Science Act. This initiative aims to boost semiconductor manufacturing in the United States by revitalizing domestic supply chains, creating jobs, and fostering innovation.
According to Secretary of the Treasury Janet L. Yellen, "The Biden-Harris Administration’s economic agenda is onshoring semiconductor manufacturing and driving U.S. innovation in this critical industry." She emphasized that semiconductors are essential for maintaining a stable supply of affordable consumer goods while also supporting national security.
U.S. Secretary of Commerce Gina Raimondo highlighted that "Today represents an important milestone in the implementation of President Biden and Vice President Harris’ historic CHIPS and Science Act." She noted that the tax credit, along with direct funding and loans, offers federal incentives crucial for expanding semiconductor manufacturing capacity within the U.S.
National Economic Advisor Lael Brainard stated, "Today’s final guidance provides critical certainty for semiconductor and solar manufacturers to make generational investments in communities across the country." Brainard added that these investments support over 125,000 jobs and position the United States as a leader in advanced manufacturing for decades to come.
The CHIPS ITC is structured to cover 25% of qualified property costs at eligible advanced manufacturing facilities if operational after December 31, 2022. It includes provisions from construction activities post-August 9, 2022. The rules also define what constitutes an "advanced manufacturing facility," specifically including semiconductor wafer production.
Treasury has worked closely with other departments such as Commerce and Defense to ensure these incentives align with national security requirements. The coordination ensures consistency with Commerce's security guardrails related to CHIPS for America funding.
About CHIPS for America: This program has allocated over $36 billion across 20 states for proposed projects expected to generate more than 125,000 jobs. Since its inception under the Biden-Harris Administration, private sector investments have exceeded $400 billion in response to public funding initiatives aimed at bolstering domestic production capabilities.
Further details about these programs can be found on their official website at https://www.chips.gov.
