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The tax credit for building a factory in the US has been raised to 35%! The “Big Beauty Act” is expected to accelerate the “return of chip manufacturing to the US”

Zhitongcaijing·07/02/2025 09:33:04
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The Zhitong Finance App learned that the US government continues to push for further key progress in the localization process of the semiconductor industry. The latest bill amendments passed by the Senate show that the “Big Beauty Act” industrial revitalization plan promoted by the Trump administration drastically raised the tax credit ratio for semiconductor companies to build factories from 25% to 35%, a further increase over the 30% plan proposed in the previous draft. This policy adjustment is an extension of the 2022 “Chip and Science Act”. This plan during the Biden administration aims to accelerate the investment layout of global semiconductor giants in the US through special grants of 39 billion US dollars and 75 billion US dollars in loan support.

According to the new regulations, companies such as Intel (INTC.US), TSM.US (TSM.US), and Micron Technology (MU.US) can enjoy upgraded tax benefits if they complete the expansion of advanced manufacturing capacity in the US by 2026. As of press release, there have been no significant changes in the stock prices of the relevant chip semiconductor companies. It is worth noting that although the Trump team had reservations about the “Chip Act” led by the Biden administration and even proposed the idea of abolishing the bill earlier this year, the actual policy implementation level continued the industrial support line.

US Secretary of Commerce Howard Lutnick recently revealed that the government is renegotiating existing subsidy programs with the industry. This reflects the differences in strategy between the two administrations in their goal of promoting the return of the semiconductor supply chain. Compared with direct subsidies, the Trump team is more inclined to guide the industrial layout through a combination of global tariff tools and tax relief.

Currently, investment in the semiconductor industry has shown a marked acceleration trend. TSMC, the world's largest chip foundry, is expanding the scale of construction in the US, and US companies such as Nvidia (NVDA.US), Micron, and GFS.US (GFS.US) are also successively adding local investments.

Daniel Newman, CEO of the technology consulting agency Futurum Group, analyzed that the Trump administration's tariff investigation on semiconductor technology imports objectively strengthened the urgency for companies to set up factories in the US. He said, “Tariff risk and tax incentives form a policy combination, which not only pushes US, Asian and European semiconductor giants to move production lines to the mainland of the United States, but also partially hedge the high cost of building local factories through a credit mechanism.”

The amendments to this bill still need to cross the final procedural hurdle, and the House of Representatives needs to complete a second vote by July 4. If it is finally passed into law, it will not only mean that support for the US semiconductor industry has reached a new level, but also marks Washington's strategy of “de-Asianization” in the semiconductor field and the “return of the chip manufacturing industry to the US,” which the Trump administration has long called for, to obtain new tools and achieve a landmark acceleration pace.

In terms of policy continuity, although there are significant differences between the Trump administration and the Biden team in terms of policy measures to stimulate semiconductor giants to build factories in the US, a cross-party consensus has been formed on the goal of reshaping the global semiconductor industry chain through the double leverage of tax adjustments and trade barriers. This may profoundly affect the global semiconductor industry pattern in the next ten years.