SEMI Investment Act
The SEMI Investment Act would amend the Internal Revenue Code to expand the advanced manufacturing investment credit (the 48D credit) so that semiconductor materials qualify as part of an “advanced manufacturing facility.” Specifically, the bill defines “semiconductor materials” to include both direct production materials (those incorporated into a finished semiconductor) and indirect production materials (specialized materials used in production, testing, inspection, or packaging but not physically in the finished semiconductor). The Secretary of the Treasury (in consultation with the Secretary of Commerce) would publish a list of which materials qualify, with initial publication within 180 days of enactment and annual updates. The bill allows taxpayers to petition for interim determinations if a material isn’t on the list. The credit would apply to property placed in service after enactment, effectively extending the incentive to investments in semiconductor materials used in U.S. semiconductor manufacturing. In short, the bill aims to strengthen domestic semiconductor production by broadening the tax credit to cover the materials used to make semiconductors, not just the equipment and facilities themselves, and establishing a formal, ongoing process to define which materials qualify.
Key Points
- 1Expands the advanced manufacturing investment credit (IRC 48D) to include semiconductor materials as eligible components of an “advanced manufacturing facility.”
- 2Semiconductors materials are split into:
- 3- Direct production materials: materials that are primarily used for and become part of the finished semiconductor (e.g., substrates, thin films, packaging substrates, bonding/ interconnect materials, etc.).
- 4- Indirect production materials: materials used in production, testing, inspection, or packaging but not physically inside the finished semiconductor (e.g., process chemicals, photolithography materials, cleaning and CMP materials, testing and packaging materials, wafer-handling materials, and related chamber materials).
- 5A broad list of specific materials is defined, with examples and criteria for what qualifies as direct vs. indirect production materials.
- 6The Secretary, in consultation with the Secretary of Commerce, must publish a list of qualifying materials within 180 days after enactment and annually thereafter; taxpayers can file petitions for interim determinations if a material isn’t listed.
- 7The amendment applies to property placed in service after enactment (not retroactive).