SCHUMER PUSHES FEDS FOR SWIFT IMPLEMENTATION OF INVESTMENT TAX CREDIT CREATED IN HIS CHIPS & SCIENCE ACT TO GET SHOVELS IN THE GROUND AND BOOST SEMICONDUCTOR INDUSTRY JOBS IN UPSTATE NY
Schumer’s Historic CHIPS
& Science Bill Has Already Spurred The Proposed Creation Of Thousands Of
Jobs In Upstate NY With Billions In CHIPS Grants On The Horizon
Now He’s Pushing To Ensure The Game-Changing Investment Tax Credit – That Will Further Level The Playing Field To Invest In the U.S. And Not Overseas Competitors– Gets Out The Door Quickly So Shovels Can Get In The Ground For Ongoing Chip Projects
Schumer: ITC Means Lots Of Jobs For Upstate NY
Continuing his relentless advocacy to bolster semiconductor manufacturing in New York, U.S. Senate Majority Leader Charles E. Schumer today sent a letter to U.S. Department of Treasury Secretary Janet Yellen urging the swift and comprehensive implementation of the Investment Tax Credit (ITC) for semiconductors that Schumer pushed to include in his CHIPS and Science Act. In the letter, Schumer explained that alongside the new federal CHIPS incentives being implemented at the Department of Commerce, the ITC is critical to the many new and ongoing semiconductor and supply chain projects recently announced in Upstate New York, and, to provide clarity and certainty to these investments and to ensure the success of these initiatives, the feds must quickly put in place comprehensive guidelines for the program. The senator said releasing guidelines for the program will allow companies to proceed with their large chip projects with greater certainty, helping to get shovels in the ground quicker and creating good-paying jobs in communities across Upstate NY.
“Thanks to my CHIPS and Science Act, manufacturing is coming back to America and Upstate New York, with hundreds of billions in investment and thousands of good-paying jobs already announced, but in order for these projects to continue they need guidance and prompt implementation of key programs like the Investment Tax Credit for semiconductor production. I fought hard to include the ITC to land Micron’s transformative investment in New York and to help accelerate other chip investments from the Hudson Valley and Capital Region to the Mohawk Valley, North Country, and Western New York. The ITC is what will help level the playing field with incentives offered by competitors overseas, so places like the Capital Region not China, Syracuse not Shanghai will be the home to the future of manufacturing and innovation,” said Senator Schumer. “That is why I wrote to Secretary Yellen to make sure the implementation of this program is a top priority, so we can quickly put New Yorkers to work rebuilding our supply chains, bringing manufacturing back to America, and making Upstate a leading global center for the semiconductor industry.”
Schumer explained that the United States,
which developed and pioneered semiconductor technology, for too long,
has been reliant on foreign producers of semiconductors, putting our national
and economic security at risk. Currently, only 12% of chips are manufactured
domestically, compared to 37% in the 1990s, and many foreign competitors,
including China, are investing heavily to dominate the industry. Nearly 75% of
global semiconductor production is now occurring in East Asia, and foreign
government subsidies drive the majority of the cost difference for producing
semiconductors overseas.
Schumer said the advanced manufacturing Investment Tax Credit, in tandem with the other federal incentivizes included in his CHIPS and Science Act, would help turn the tide on this trend by bringing manufacturing back to America and investing in other key technology and R&D, so places like Upstate New York can lead the world in innovation and manufacturing. Schumer said that the billions in CHIPS grants, while substantial, will not fully make up for the foreign cost differential, and the ITC will help fill this gap through targeted support to grow American semiconductor manufacturing. Schumer personally negotiated the inclusion of the ITC in the final CHIPS and Science Act to ensure the necessary incentives are in place to bring microchip manufacturing back to the U.S., especially to Upstate New York.
In New York State alone, Micron has announced an historic $100 billion investment to build a cutting-edge memory fab in Central New York—a project which the company has said requires the ITC to be successful. GlobalFoundries plans to build a second fab in the Capital Region that will be a key supplier to the auto and defense industries, onsemi recently acquired a fab in the Hudson Valley to be home to the only 12-inch power discrete and image sensor fab in America, and Wolfspeed recently opened the first, largest, and only 200mm silicon carbide fabrication facility in the world in the Mohawk Valley. In addition, suppliers like Corning Incorporated, which manufacturers glass critical to the microchip industry at its Canton and Fairport, NY plants, as well as Edwards Vacuum, which recently announced a $319 million investment to build a U.S. dry pump manufacturing facility in the Western New York Science & Technology Advanced Manufacturing Park (STAMP) to supply the microchip industry, see the ITC as integral to the success of their proposed Upstate New York expansions. Schumer said the ITC is critical for accelerating and expanding the semiconductor industry in New York across these large-scale, job creating projects.
Specifically, the ITC provides a 25% investment tax credit for investments in semiconductor manufacturing. The credit covers both manufacturing equipment as well as the construction of semiconductor manufacturing facilities. It also includes incentives for manufacturing the specialized tooling equipment required in the semiconductor manufacturing process. Schumer said the ITC is a game-changer that, when paired with the CHIPS grant funding, would help erase the cost difference for semiconductor production happening across Upstate New York and the country.
The ITC also includes safeguards similar to CHIPS funding to ensure that recipients of the ITC cannot build advanced semiconductor production facilities in countries that present a national security concern, including the People’s Republic of China.
A copy of Schumer’s letter to Treasury Secretary Yellen appears below:
Dear Secretary Yellen:
I write to express my concerns regarding the proper design of the guidance and prompt implementation of the Investment Tax Credit (ITC) for semiconductors. I fought hard to include the ITC as part of the CHIPS and Science Act because it is an essential tool, alongside the new federal CHIPS incentives being implemented at the Department of Commerce, to bring semiconductor manufacturing back to the U.S. As we continue to address supply chain concerns and national security threats, strengthening our nation’s semiconductor supply chains is an urgent task that requires us to put in place as quickly as possible the new federal programs we have passed into law.
Companies are eager to make investments and move forward on game-changing projects across the country, but they want the certainty that the incentives are accessible. In New York State alone, Micron has announced an historic $100 billion investment to build a cutting-edge memory fab in Central New York—a project that will require the ITC to be successful. GlobalFoundries plans to build a second fab in the Capital Region that will be a key supplier to the auto and defense industries, onsemi recently acquired a fab in the Hudson Valley to be home to the only 12-inch power discrete and image sensor fab in America, and Wolfspeed recently opened the first, largest, and only 200mm silicon carbide fabrication facility in the world in the Mohawk Valley. These companies see the ITC as critical to accelerating and expanding their investment plans. Additionally, suppliers like Corning Incorporated, which manufacturers glass critical to the microchip industry at its Canton and Fairport, NY plants, as well as Edwards Vacuum, which recently announced a $319 million investment to build a U.S. dry pump manufacturing facility in the Western New York Science & Technology Advanced Manufacturing Park (STAMP) to supply the microchip industry, see the ITC as integral to the success of their proposed U.S. expansions.
As you know, some projects applying for the ITC and CHIPS funding will be onshoring manufacturing through a phased approach. The ITC is designed not only to enable the initial phase of a domestic greenfield fab project but also to enable continued investment as the market expands and advances. In addition, some projects designed to be funded by CHIPS will also utilize an ongoing, phased approach to construction in order to create integrated fabs in an advanced manufacturing facility. I hope you will factor these logistical constraints into the regulatory design of the CHIPS ITC.
I am also interested in several components of the CHIPS Act implementation related to project timelines. First, I ask for careful consideration of the design of the commence construction guidance for the ITC. The guidance should match Congress’s intent that CHIPS Act projects be able to restore large-scale semiconductor manufacturing to the U.S. over time in phases and therefore should match the duration of projects funded by other CHIPS incentives. Second, I urge consideration of the time constraints imposed by the National Environmental Policy Act (NEPA) process, which should not impede the ability to use the ITC. Third, guidance with respect to project start dates for ITC eligibility should reflect realistic timelines, with the goal of allowing widespread private sector uptake. Finally, in implementing the ITC, Treasury should take note of the diversity of equipment necessary for the successful expansion of a domestic microchip industry, including equipment needed to produce silicon and silicon carbide and equipment included in lithography machines that are essential to chip production.
Bringing semiconductor manufacturing back to the U.S. is an urgent priority for our economic competitiveness and national security. I worked tirelessly to pass the CHIPS and Science Act with the ITC included to address this pressing national need, and its thoughtful implementation by the Department of Treasury and others is critical to ensuring the success of the legislation--enabling semiconductor companies to invest in new manufacturing in the U.S. and ensure our country leads the world in this critical technology for generations to come.
I welcome further discussion on this issue. Thank you for your consideration.
Sincerely,
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