Congress Moves to Extend CHIPS Act Equipment Tax Credit Beyond 2026

By NineScrolls Team · 2026-03-13 · 3 min read · Industry

Table of Contents

The Tax Credit at Stake

Section 48D of the U.S. tax code—the Advanced Manufacturing Investment Credit (AMIC)—provides an investment tax credit for semiconductor manufacturing equipment and facility construction. Enacted as part of the CHIPS and Science Act of 2022, the credit was originally set at 25 percent and applies to property placed in service after December 31, 2022, with construction beginning by December 31, 2026.

Eligible investments include fabrication equipment, cleanrooms, and other property essential to semiconductor manufacturing processes. The credit covers both new fab construction and equipment upgrades at existing facilities.

2025 Expansion to 35 Percent

The One Big Beautiful Bill Act, signed into law by President Trump on July 4, 2025, expanded the AMIC from 25 percent to 35 percent for property placed in service after 2025. The legislation maintained the existing deadline: construction must begin by December 31, 2026.

At 35 percent, a $100 million equipment purchase generates a $35 million tax credit. For companies investing billions in new fab capacity, the credit represents a substantial offset against capital costs and has been a decisive factor in several high-profile facility location decisions.

Bills to Extend Beyond 2026

With the construction-start deadline approaching, multiple legislative proposals aim to push the timeline further out:

BASIC Act — The bipartisan Building Advanced Semiconductors Investment Credit Act, co-sponsored by Representatives Claudia Tenney (R-NY) and John Mannion (D-NY), proposes extending the credit through at least 2030.

SEMI Investment Act — This bill would extend the AMIC through 2031 and clarify that critical materials suppliers, including semiconductor equipment component makers, are eligible for the credit.

A Senate draft tax bill has also proposed expanding the scope of the 48D credit, though details remain in flux as the legislative process continues.

Industry Position

SEMI and the Semiconductor Industry Association (SIA) are lobbying for permanent extension. Their core argument: semiconductor fabs take 3 to 5 years to build, so a 2026 construction-start deadline creates uncertainty for projects that are still in the planning or permitting phase. Companies need assurance that the credit will be available when their equipment is delivered and installed, which may be years after the construction-start date.

The Information Technology and Innovation Foundation (ITIF) has called for both extension and broadening of the credit, arguing that the current scope should be expanded to better cover the full semiconductor supply chain, including equipment manufacturers and materials suppliers.

What It Means for Equipment Buyers

For purchasers of precision plasma processing and thin film deposition systems, the 48D credit directly reduces the after-tax cost of capital equipment. A 35 percent credit on a $5 million deposition tool translates to $1.75 million in tax savings. This incentive applies to both the equipment itself and the cleanroom infrastructure required to house it.

If the credit expires at the end of 2026 without extension, the effective cost of semiconductor equipment in the U.S. will increase overnight. This could slow the domestic equipment procurement cycle and shift investment to geographies that offer competing incentives, including the EU's European Chips Act and Japan's semiconductor subsidies.

Sources