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Tax policy can provide a powerful and immediate incentive to promote manufacturing and economic competitiveness across the semiconductor supply chain. Governments around the world have utilized aggressive tax policy in concert with other incentives to attract semiconductor manufacturing facilities and support robust regional supply chains. The lack of similar incentives in the U.S. has contributed tohe declining U.S. share of global semiconductor manufacturing capacity in the past twenty years, and the U.S. should adopt federal tax and incentive policies that are globally competitive.

Traditionally, most incentive packages for U.S. semiconductor manufacturing have been offered at the state level. Strong federal policies to support U.S. semiconductor research and manufacturing will strengthen the national semiconductor ecosystem, support U.S. leadership in the industry and expand U.S. manufacturing capacity and investment. National security concerns related to manufacturing of critical technologies and components of military technologies, IoT, and 5G infrastructure have heightened federal interest in providing adequate incentives to ensure a strong U.S.-based manufacturing sector.