The CHIPS and Science Act aims to boost the U.S. semiconductor supply chain and could affect financial reporting.
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On Aug. 9, 2022, President Joe Biden signed the CHIPS and Science Act of 2022 (CHIPS Act), which seeks to bolster the U.S. semiconductor supply chain and promote research and development of advanced technologies in the United States. The CHIPS Act creates significant new funding opportunities and potential tax benefits for companies exploring investments in the semiconductor supply chain and other critical technologies.
Broadly, the CHIPS Act’s financial benefits are implemented primarily through two mechanisms. First, it establishes a new tax credit (advanced manufacturing credit) for investments in semiconductor manufacturing facilities in the United States. The credit is equal to 25% of the value of a qualified investment in a facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment. Second, the CHIPS Act allocates $52.7 billion over five years to fund grants, loans, loan guarantees, and other programs to incentivize semiconductor manufacturing in the United States as well as related research and development and workforce development initiatives.