Senate plan increases chipmaker tax break to 30%

A new Senate tax plan is set to raise the tax credit for U.S. semiconductor companies from 25% to 30% for building factories. This change aims to encourage chipmakers to invest more in American manufacturing before the credit expires in 2026. The proposal supports President Joe Biden’s 2022 Chips and Science Act, which offered $39 billion in grants and up to $75 billion in loans to boost the U.S. semiconductor industry.

Major companies like Intel, Taiwan Semiconductor, Samsung, and Micron are expected to benefit the most from this increase. The tax credit is a key part of the Chips Act, designed to bring high-paying tech jobs to the U.S. and strengthen domestic production. However, President Donald Trump has pushed to repeal the Chips Act, though lawmakers from both parties show little support for ending these job-creating subsidies.

Instead, Trump’s team, including Commerce Secretary Howard Lutnick, is renegotiating deals with chipmakers to secure larger investments without extra taxpayer money. This Senate bill, part of a larger tax package worth trillions, also includes Trump’s campaign promises, like keeping his 2017 tax cuts and removing taxes on tips. To cover costs, it proposes cutting clean energy credits and Medicaid benefits. The Senate aims to finalize the bill by July 4, balancing economic growth with fiscal concerns.