SIA and 17 Business Groups Urge Congress to Extend Semiconductor Manufacturing Tax Credit Before Year-End Expiry

The Clock Is Ticking on America’s Chip Manufacturing Incentive

On May 12, 2026, the Semiconductor Industry Association (SIA) and 17 other major business and trade groups sent a joint letter to Congress urging the extension and expansion of the Advanced Manufacturing Investment Credit (AMIC) — a 25% investment tax credit for semiconductor manufacturing facilities that was established under the CHIPS and Science Act.

The AMIC is set to expire at the end of 2026, and the coalition argues that letting it lapse would undermine hundreds of billions of dollars in private investment already committed to U.S. semiconductor manufacturing.

Source: Semiconductor Industry Association, May 12, 2026; Circuits Assembly

What Is the AMIC?

The Advanced Manufacturing Investment Credit, codified as Section 48D of the Internal Revenue Code, provides an eligible taxpayer with a tax credit of up to 25% of qualified investments in advanced manufacturing facilities for semiconductors and semiconductor manufacturing equipment. It was designed as a companion to the CHIPS Act’s direct subsidies — while the CHIPS grants fund specific projects, the AMIC creates a broad incentive for any company investing in U.S. chip production capacity.

Since its enactment, the AMIC has been credited with helping catalyze what the coalition letter describes as “hundreds of billions of dollars in private investment” across the U.S. semiconductor ecosystem, including new fabs from TSMC, Samsung, Intel, and dozens of smaller manufacturers.

The Coalition’s Ask: Extend and Expand

The 18-group coalition is not just asking for a simple extension. Their letter calls for two key changes:

1. Extension Beyond 2026

The current expiry date creates a cliff that discourages long-term investment planning. Semiconductor fabs take 3-5 years to build and 10-20 years to operate profitably. A tax credit that expires before the first wafers ship from projects it incentivized sends the wrong signal to investors.

2. Expansion Beyond Manufacturing

The coalition wants the credit expanded to cover semiconductor design investments, not just manufacturing. This aligns with the proposed STAR Act (Supporting Transformative Advancements through Research), which would extend the AMIC and add coverage for R&D and design activities.

The rationale: the semiconductor value chain includes design, manufacturing, packaging, and testing. Incentivizing only manufacturing creates an imbalance that pushes design teams overseas while trying to bring production home.

Who Is in the Coalition?

The letter is signed by 18 organizations spanning semiconductors, electronics, defense, and general industry:

The SIA leads the coalition, which includes organizations representing the broader electronics manufacturing ecosystem. The breadth of the coalition — spanning tech-specific groups and general business organizations — signals that the semiconductor supply chain issue has become a mainstream economic competitiveness concern, not just a niche tech policy matter.

Impact on the PCB and Electronics Manufacturing Supply Chain

While the AMIC directly targets chip fabrication, its ripple effects reach the entire electronics ecosystem:

Downstream PCB Demand

Every new semiconductor fab generates sustained demand for PCBs — not just in the products the chips go into, but in the fab equipment itself. Wafer processing tools, test equipment, and clean-room infrastructure all require high-reliability PCBs. The expansion of U.S. chip manufacturing directly benefits the domestic PCB and electronic assembly supply chain.

Material Supply Chain Localization

As more semiconductor manufacturing moves to or stays in the U.S., there is growing pressure to localize the supporting material supply chains. PCB substrate materials, copper-clad laminates, and chemicals currently sourced primarily from Asia could see new investment in domestic production if the policy framework supports it.

Workforce Development

The coalition’s letter also touches on workforce needs. Building fabs requires skilled technicians and engineers — the same talent pool that PCB fabrication and electronic assembly compete for. Expanding the semiconductor ecosystem in the U.S. creates both competition and opportunity for the PCB industry workforce.

What Happens if AMIC Expires?

If Congress fails to extend the AMIC before the end of 2026:

• New projects lose incentive: Companies evaluating U.S. vs. international locations for new fabs would see the U.S. cost structure suddenly become 25% less competitive for qualified investments.
• Existing commitments may slow: While projects already underway will likely continue, the pace of Phase 2 and Phase 3 expansions at sites like TSMC Arizona and Samsung Texas could decelerate.
• Competitive disadvantage: Other countries — particularly Japan, Korea, and EU member states — offer substantial, long-term manufacturing incentives that do not have imminent expiry dates.

The semiconductor industry’s argument is straightforward: you cannot build a decades-long strategic manufacturing capability on a tax credit that expires in seven months.

Looking Ahead

The AMIC extension will likely become part of the broader tax policy debate expected in the second half of 2026, alongside discussions about extending or modifying the Tax Cuts and Jobs Act provisions. Whether semiconductor incentives get treated as a standalone priority or packaged into larger legislation will depend on the political dynamics in Washington.

For electronics hardware companies, the takeaway is practical: the U.S. semiconductor supply chain is expanding, and the policy framework supporting that expansion is likely to continue — but the details and timeline remain uncertain. Planning for multiple scenarios is prudent.

Image: ThisisEngineering via Unsplash

Sources:

• Semiconductor Industry Association, “Top Business Groups Urge Congress to Extend, Expand Successful Semiconductor Tax Credit,” May 12, 2026
• Circuits Assembly, “Business Groups Push Congress to Extend, Expand Semiconductor Manufacturing Tax Credit,” May 2026
• World News / WN.com, “Top Business Groups Urge Congress to Extend Expand Successful Semiconductor Tax Credit,” May 12, 2026