ITIF Urges Congress to Make CHIPS Act Tax Credit Permanent

The Information Technology and Innovation Foundation has called on Congress to make the CHIPS Act's investment tax credit permanent, arguing in a September 22, 2026 blog post that a temporary subsidy cannot sustain a capital-intensive U.S. semiconductor buildout.

The 25 percent credit, enacted under the CHIPS and Science Act of 2022, currently carries an expiry date. ITIF's argument is simple: fab construction cycles run longer than the credit's statutory window. That mismatch, the think tank says, distorts investment decisions.

What does the credit cover?

The Section 48D advanced manufacturing investment credit refunds a quarter of qualified spending on semiconductor manufacturing facilities and equipment. It applies to fabs, expansion projects, and production tooling. Congress tied it to a construction deadline rather than making it a standing feature of the tax code.

ITIF contends this design is the problem. A permanent credit would give firms certainty across multi-year build timelines. A expiring one rewards projects that happen to fit the window.

What is not said?

The blog post, as surfaced through its headline and syndication, makes a policy case rather than a market forecast. It offers no capacity figures. It names no specific fabs, no wafer sizes, no process nodes.

That absence matters. The industry's own numbers are large and public: leading-edge fab projects announced since 2022 run to tens of billions of dollars each. But ITIF's argument in the available text rests on the structure of the incentive, not on a quantified gap.

Readers should also note the source's orientation. ITIF has consistently favored industrial policy for semiconductors. Its advocacy for permanence is a continuation of that position, not a new finding.

Why permanence matters commercially

The credit shapes project economics. A 25 percent refund on qualified investment can swing internal rate of return calculations for any new fab, packaging plant, or tool purchase. Firms weighing U.S. sites against alternatives in Japan, the EU, or South Korea — all of which run their own subsidy programs — price these incentives directly into site decisions.

An expiring credit creates a cliff. Projects that cannot qualify before the deadline may be deferred, resized, or located abroad. ITIF's implicit claim is that permanence removes that cliff and steadies the pipeline.

The counterargument exists. Critics of open-ended subsidies warn that permanent credits invite dependency and inflate construction costs. The available text does not address that critique.

What happens next?

Any change requires congressional action. Tax provisions move through committees that weigh revenue cost against industrial goals, and a permanent credit carries a materially higher score than a temporary one.

For chipmakers, the stakes are concrete. Every quarter of legislative uncertainty adds risk to projects still in planning, and ITIF's post ensures the permanence question stays on the agenda as the credit's deadline approaches.