HR-6055-119
Referred to the House Committee on Ways and Means.
Sponsored by Brian Fitzpatrick (R-PA)
What it does
This bill would amend the Internal Revenue Code to expand the existing Advanced Manufacturing Investment Credit (Section 48D) in two ways. First, it would broaden the definition of "advanced manufacturing facility" to include facilities that manufacture semiconductor materials — both materials physically incorporated into finished chips (direct production materials) and specialized materials used in the manufacturing process but not incorporated into the final product (indirect production materials). Second, it would extend the credit's availability from December 31, 2026 to December 31, 2031, giving companies a longer window to begin qualifying construction projects.
Who benefits
U.S. semiconductor chip fabrication facilities (fabs) that would gain a longer credit window. Manufacturers of semiconductor materials such as chemical suppliers, substrate producers, photoresist makers, and specialty gas companies — many of which are small-to-mid-size firms not previously eligible for the credit. Domestic suppliers of process chemicals, cleaning agents, and packaging materials used in chip production. Workers employed at qualifying facilities. Communities hosting new or expanded semiconductor manufacturing plants. Defense and technology sectors that depend on a domestic semiconductor supply chain. Investors in U.S. semiconductor infrastructure.
Who is hurt
Foreign semiconductor material suppliers who compete with domestic producers and would not receive equivalent subsidies. U.S. taxpayers generally, who would bear the cost of the expanded and extended tax credit. Competing domestic industries that do not receive similar targeted tax credits and may face a relative disadvantage in attracting capital. Treasury revenue, as the credit reduces federal tax receipts. Companies that manufacture generic materials with broad applications may face administrative burden in petitioning for eligibility determinations.
Supporters argue
Supporters argue that the original Section 48D credit covered chip fabrication but left out the upstream materials supply chain — a critical vulnerability exposed when global chip shortages disrupted automotive, defense, and consumer electronics production. They contend that photoresists, specialty gases, and substrates are just as strategically important as the fabs themselves, and that extending the credit to 2031 gives companies the long planning horizons needed to justify billion-dollar capital commitments. They point to the CHIPS and Science Act's goal of rebuilding domestic semiconductor capacity as incomplete without a secure domestic materials base.
Opponents argue
Opponents argue that expanding and extending targeted tax credits amounts to industrial policy that picks winners among industries, distorting capital allocation away from sectors that receive no comparable subsidy. They contend that the credit's broad and technically complex eligibility definitions — including a catch-all "other material" category determined by the Secretary of the Treasury — delegate significant discretionary authority to the executive branch with limited congressional oversight. They also argue that extending the credit through 2031 increases the long-term revenue cost to the federal government at a time of significant fiscal pressure, and that market forces, not tax preferences, should drive domestic manufacturing decisions.