US Senate Introduces Bill for 25% Tax Credit Benefits in Semiconductor Sector

Approval of $52 Billion Support Package Followed by Tax Credit Benefits for 'Full Support of Semiconductor Industry'

[Photo by AFP Yonhap News]

[Asia Economy Reporter Byunghee Park] Major foreign media reported on the 17th (local time) that a bill proposing a 25% tax credit benefit for investment in the semiconductor sector was introduced in the U.S. Senate.

The bill was prepared through bipartisan agreement between the Democratic and Republican parties. It was introduced by Senate Finance Committee Chairman Ron Wyden, a Democrat, Senate Finance Committee Republican Ranking Member Mike Crapo, along with Democratic Senators Mark Warner and Debbie Stabenow, and Republican Senators John Cornyn and Steve Daines. They stated that the bill would provide reasonable and clearly targeted incentives for the domestic semiconductor manufacturing sector.

Chairman Wyden said, "We cannot allow other countries to continue attracting semiconductor factories," adding, "It not only threatens the U.S. economy but also results in the loss of numerous quality jobs." The senators emphasized the need for support, noting that due to subsidies, the cost difference between semiconductor production in the U.S. and overseas can be as much as 70%.

The Semiconductor Industry Association of the U.S. welcomed the bill, stating, "The tax credit benefits can strengthen the U.S.'s semiconductor production and research capabilities and make significant contributions to job creation, national security, infrastructure, and the semiconductor supply chain."

On the 8th, the Senate also passed a bill providing $52 billion in support for production and research in the semiconductor and telecommunications equipment sectors. With President Joe Biden emphasizing semiconductor competitiveness, the Senate appears to be moving toward full support. The $52 billion support package includes $2 billion for semiconductors used in the automotive industry, which has recently been suffering from severe supply shortages. When preparing the bill, the Senate pointed out that the U.S.'s production share in the semiconductor and microelectronics sectors has fallen from 37% in 1990 to 12% currently.

U.S. Secretary of Commerce Gina Raimondo previously stated that if the $52 billion support bill passes, it could increase the number of new semiconductor factories in the U.S. by 7 to 10. She also emphasized that the bill would induce investments from state governments and private companies, effectively triggering over $150 billion in investment in semiconductor production and research sectors.