Senate Finance Committee leadership called for an extension of the Advanced Manufacturing Investment Credit, which is available to semiconductor manufacturing facilities through 2026. The ask came amid bipartisan and industry efforts to extend and expand the credit.
Section 48D credit basics
IRC § 48D provides for an Advanced Manufacturing Investment Credit for semiconductor and semiconductor equipment manufacturing facilities. It is available for qualified property, which includes tangible depreciable or amortizable property that is integral to the operation of the advanced manufacturing facility.
The credit was originally established under the 2022 CHIPS and Science Act, which provided a 25% credit for qualified property placed in service after December 31, 2022.
Last year, the One Big Beautiful Bill Act increased the credit to 35% for property that is placed in service after December 31, 2025. However, the OBBB failed to address the § 48D credit’s December 31, 2026, sunset.
Bipartisan support for extension, enhancement
On August 5, Senate Finance Committee Chair Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR) released a joint statement reaffirming their support for the § 48D credit — and calling for its extension.
“The Advanced Manufacturing Investment Credit is a critical tool for strengthening domestic semiconductor supply chains, creating good-paying jobs and advancing our national security interests,” said the lawmakers. They cite “significant investments across the United States” after the credit’s establishment.
The lawmakers also note the credit was based on a 2021 bill they co-sponsored, the Facilitating American-Built Semiconductors Act, S. 2107.
It’s not just Crapo and Wyden who are highlighting the § 48D credit. Two separate bipartisan, bicameral bills introduced this congressional session call for enhancement of the credit.
The SEMI Investment Act, S. 1642/H.R. 6055, would expand the credit’s availability to upstream materials used in semiconductor production. The House draft also would extend the credit through 2031.
Meanwhile, the Semiconductor Superiority Act, S. 4750/H.R. 8959, would clarify that the § 48D credit is available for space-based semiconductor manufacturing.
Industry efforts
The bipartisan push comes amid industry efforts to raise awareness of the § 48D credit’s impact — and its impending expiration.
This May, a coalition of business and trade groups told congressional leadership that “global semiconductor demand” could exceed $1.6 trillion by 2027. “It is imperative the U.S. maintains competitive incentives by extending and expanding the [Advanced Manufacturing Investment Credit] to secure continued investment across the semiconductor ecosystem,” they added.
And last month, SEMI, a global industry association, met with members of Congress to call for a multi-year extension of the § 48D credit. The group also pushed for expansion to the credit to cover materials used in semiconductor manufacturing as well as currently excluded design activities.
“The Advanced Manufacturing Investment Credit has been one of the most effective tools this country has for winning semiconductor investment, and its looming expiration is creating real uncertainty for companies planning projects today,” said SEMI Americas’ Joe Stockunas.
SEMI explained that “[m]ajor semiconductor producing economies” are competing for new investment as semiconductor demand grows. It cited research and development credits offered by South Korea and Taiwan. In addition, the group said, South Korea offers incentives for semiconductor supply chain investment costs while Japan provides a 20% corporate income tax reduction and “targeted grants.”
For more on the Advanced Manufacturing Investment Credit, see Checkpoint’s Federal Tax Coordinator 2d ¶ L-17960.
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