U.S. President Donald Trump has released his third iteration of the massive domestic policy grab, more commonly known as the “big beautiful bill.” This latest proposal is intended to help lower the costs for semiconductor manufacturers looking to set up production facilities in the U.S. The move comes as the Trump administration pushes assertively to create a more robust domestic chip supply chain. This new initiative is vitally important, particularly as we continue to face challenges stemming from worldwide shortages.
The bill includes significantly strengthened tax credits designed to lure the big manufacturers of the semiconductor industry. This will help galvanize investments from companies like Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia, Micron, and GlobalFoundries to build U.S.-based manufacturing. By offering these tax benefits, the administration hopes to incentivize businesses to move their production back to U.S. shores.
Earlier this year, President Trump proposed repealing the CHIPS Act. This act had provided $39 billion in grants and $75 billion in loans for semiconductor manufacturing facilities in the U.S. So far, Republican-state legislators have been hesitant to go along with this repeal. It was herculean compared to last month’s very close passage of the House of Representatives own version of the bill. This creates a high-stakes, complex legislative environment moving forward.
Trump has suggested that passing this new piece of legislation should be as urgent as a July 4 deadline. He has earlier advocated for tariffs on foreign manufacturers as a key strategy for promoting domestic production of much-needed semiconductors. And his administration is even now investigating imports of semiconductor technology. This leaves open the possibility of imposing new responsibilities on the sector.
Daniel Newman, CEO at the tech advisory firm Futurum Group, further underscored the highly favorable climate for semiconductor manufacturers.
“Given the risk of tariffs, increasing manufacturing in the U.S. remains a key consideration for these large semiconductor companies,” – Daniel Newman.
In fact, Trump’s newest bill goes further than the tax incentives established under the 2022 CHIPS and Science Act. These new provisions would go much deeper to strengthen those incentives. Combined, these incentives are intended to promote investment and technological advancement within the semiconductor industry. They’re helping to reduce our dependence on foreign producers.
The administration of course very much wants to see this aggressive promotion of a strong domestic chip supply chain. How quickly lawmakers will act on this new proposal remains to be seen. The success of these efforts largely depends on bipartisan support and a speedy legislative process.