U.S. Senators Marsha Blackburn, Michael Bennet, Thom Tillis, and Chris Coons have introduced a bipartisan bill aimed at strengthening domestic semiconductor supply chains. The proposed legislation, named the Strengthening Essential Manufacturing and Industrial (SEMI) Investment Act, seeks to expand tax incentives for semiconductor facilities to include upstream materials suppliers. This initiative is intended to support domestic investment and reduce dependency on foreign countries like China.
Senator Blackburn emphasized the urgency of reducing reliance on China, stating that “Communist China has rapidly increased its grip on semiconductor production, threatening America’s economy and national security.” She added that the SEMI Investment Act would enhance manufacturing within the United States and secure supply chains by expanding tax incentives for semiconductor facilities.
Senator Bennet highlighted the importance of sustained investment across the semiconductor supply chain: “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.”
Senator Tillis pointed out the necessity of fortifying the domestic semiconductor supply chain for national security and economic resilience. He stated, “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.”
Senator Coons discussed the broader implications of semiconductors in various industries: “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.” He also noted that expanding the tax credit established by President Biden’s CHIPS and Science Act would strengthen America’s semiconductor supply chain.
China’s dominance in global processing capacity for rare earth minerals used in semiconductor manufacturing has been fueled by substantial government subsidies. Recently, China imposed new export bans on essential materials such as gallium, germanium, and antimony.
Under current U.S. law, tax incentives are limited to facilities directly producing semiconductors or related equipment. Much of the necessary upstream materials are sourced from China, making critical supply chains vulnerable. The SEMI Investment Act aims to mitigate this vulnerability by extending tax credits to include upstream material suppliers within the U.S., thus fostering innovation, job creation, and industry resilience.
