WASHINGTON (May 8, 2025) – The American Chemistry Council (ACC) issued the following statement in support of the Strengthening Essential Manufacturing and Industrial (SEMI) Investment Act (S. 1642), which would expand tax incentives for semiconductor facilities to include essential upstream materials suppliers. The bipartisan legislation was reintroduced by Senators Marsha Blackburn (R-TN), Thom Tillis (R-NC), Michael Bennet (D-Colo.), and Chris Coons (D-Del.).
“ACC welcomes Senate reintroduction of the SEMI Investment Act and commends Senators Blackburn, Tillis, Bennet, and Coons for their initiative on this vital issue for the U.S. economy. This bipartisan legislation will help ensure that essential chemistries and materials can meaningfully contribute to semiconductor manufacturing in the United States. It will support supply chain resiliency and America’s ability to compete with countries like China. We urge prompt passage by the Senate.
“U.S. chemical manufacturers have been key to the semiconductor industry since its inception and continue to be critical to its success – a fact that was celebrated at a Congressional Chemistry Caucus reception and showcase last year. According to the semiconductor industry, it takes no fewer than 500 highly specialized chemicals to manufacture one semiconductor chip.
“ACC participated in the Department of the Treasury’s rulemaking process for implementing the Advanced Manufacturing Investment Tax Credit (Section 48D of the Internal Revenue Code) established by the CHIPS and Science Act of 2022. In our comments on Treasury’s Notice of Proposed Rulemaking, we pointed out that while the proposal incentivized semiconductor manufacturing, it failed to support the production of essential upstream materials.
“We believe Congress intended for Treasury and the IRS to broadly interpret ‘semiconductor manufacturing equipment’ when issuing guidance as to how the Section 48D tax credit should be applied. We had urged Treasury to harmonize the tax credit with the U.S. Department of Commerce interpretation such that it would include facilities whose primary purpose is producing materials integral and essential to manufacturing of semiconductors.
“We believe Treasury’s final regulations, while they reflect some improvements to eligibility for the tax credit, do not fully address the problem. Our nation must prioritize incentives to enhance supply chain resiliency, including fully leveraging the tax credit that Congress provided. The SEMI Investment Act is a smart solution.
“Senators Blackburn, Tillis, Bennet, and Coons introduced a similar provision as an amendment to the FY 2025 National Defense Authorization Act (NDAA) to ensure that the Section 48D credit applies to producers of essential materials, as Congress intended.”
