The U.S. Department of the Treasury and the Internal Revenue Service have released final rules for the Advanced Manufacturing Investment Credit (CHIPS ITC).
The Inflation Reduction Act set forth demand and supply-side incentives to bolster domestic solar manufacturing through production tax credits and investment tax credits for developers using domestic content. Up until now, most of the credits were focused on the final stages of the supply chain.
The new rules provide clarity on incentives involved in the domestic renewable energy supply chain; they are moving up farther and are expected to usher in a new era of semiconductor manufacturing in the United States.
According to a statement from the Treasury, “CHIPS ITC is generally equal to 25% of the basis of any qualified property that is part of an eligible taxpayer’s advanced manufacturing facility if the qualified property is placed in service after December 31, 2022, and covers construction occurring after the enactment of the CHIPS and Science Act on August 9, 2022.”
The CHIPS ITC is strengthening the resilience of the semiconductor supply chain, creating good-paying jobs by incentivizing investments in U.S. facilities that manufacture semiconductors, including wafer production, or semiconductor manufacturing equipment.
The final rule clarifies that semiconductor wafer production includes the production of wafers used for PV solar generation.
“The Biden-Harris Administration’s economic agenda is onshoring semiconductor manufacturing and driving U.S. innovation in this critical industry,” said Secretary of the Treasury Janet L. Yellen. “Semiconductors are vital to ensuring a stable supply of low-cost consumer goods and our investments continue to strengthen those supply chains, create good-paying jobs, and safeguard our national security.”
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