Blackburn, Bennet, Tillis, Coons Introduce Bill to Strengthen Domestic Semiconductor Supply Chains
December 20, 2024
WASHINGTON, D.C. – U.S. Senators Marsha Blackburn (R-Tenn.), Michael Bennet (D-Colo.), Thom Tillis (R-N.C.), and Chris Coons (D-Del.) introduced the Strengthening Essential Manufacturing and Industrial (SEMI) Investment Act to expand tax incentives for semiconductor facilities to include upstream materials suppliers. This would help protect U.S. defense supply chains by supporting domestic investment and reducing reliance on foreign adversaries like China.
“Over the past few years, Communist China has dramatically ramped up its production of semiconductors, which power everything from cell phones to computers to trains,” said Senator Blackburn. “By expanding tax incentives for semiconductor facilities, the SEMI Investment Act would support investment right here at home and increase supply chain security.”
“The CHIPS and Science Act revitalized advanced domestic manufacturing and restored funding for cutting-edge research and development. But without sustained investment across the semiconductor supply chain, we risk undermining these important efforts,” said Senator Bennet. “The Strengthening Essential Manufacturing and Industrial Investment Act (SEMI) Investment Act will secure our supply chains and ensure companies across the semiconductor ecosystem are able to invest in and expand U.S. production.”
“Congress passed the CHIPS Act to support our entire domestic semiconductor supply chain,” said Senator Tillis. “It is crucial for our national security and economic resilience that we get this policy right and I am proud to cosponsor this legislation to ensure we reduce our reliance on our adversaries like China.”
“Semiconductors drive everything from smartphones to medical devices to automobiles, and countries that excel at manufacturing them will be stronger and more secure in the decades ahead,” said Senator Coons. “Expanding the semiconductor manufacturing investment tax credit—established by President Biden’s CHIPS and Science Act—will strengthen our semiconductor supply chain and advance us toward that goal.”
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BACKGROUND: |
- Fueled by massive government subsidies, China’s state-controlled companies now dominate nearly 85% of global processing capacity for rare earth minerals used in semiconductor manufacturing.
- Earlier this month, China imposed new export bans on rare earth materials like gallium, germanium, and antimony, which are key to semiconductor production.
- Under current law, tax incentives are only available for facilities that directly produce semiconductors or manufacturing equipment. However, much of the upstream materials and components used in these facilities are sourced from China, leaving our critical supply chains vulnerable and heavily reliant on foreign adversaries.
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SEMI INVESTMENT ACT: |
- To safeguard national security and counter China’s growing dominance in the semiconductor sector, the SEMI Investment Act would foster the development of a robust U.S.-based supply chain by expanding the tax credit to include upstream materials suppliers.
- Expanding incentives to include upstream production would also bolster American innovation, create jobs, and ensure the resilience of this vital industry.
Click here for bill text.
