Semiconductor manufacturers that break ground on new chip fabs in the US before the end of 2026 could be eligible for a tax credit of 35 percent under the latest version of President Donald Trump’s “Big Beautiful Bill,”

The figure is a five percent increase on proposals included in a draft version of the bill from last month, and ten percent more than chip companies are currently entitled to.

Companies that begin construction before the deadline can continue to claim credits for the length of the project, the report noted, an apparent acknowledgement from lawmakers that building such facilities is a significant undertaking.

The bill passed the US House on May 22 on a 215-214 vote, and cleared the Senate on June 1 after Vice President JD Vance broke the 50-50 tied vote. It has now headed back to the US House of Representatives for a final vote, with lawmakers hoping to pass the bill before July 4.

The increased tax credit expands on the 25 percent currently offered under the $280bn Biden-era CHIPS and Science Act. Originally approved by Congress in July 2022, $52bn of the overall funding package was designated as subsidies for US semiconductor manufacturers, with GlobalFoundries, Intel, TSMC, Samsung Electronics, Micron, SK Hynix, and GlobalWafers all receiving funding under the Act during Biden’s term in office.

Trump has previously disparaged the CHIPS and Science Act on numerous occasions, however, with Commerce Secretary Howard Lutnick recently telling members of the Senate Appropriations Committee that some of the grants “just seemed overly generous,” adding, “we’ve been able to renegotiate them… for the benefit of the American taxpayer.”

Since being elected for a second term, Trump has pledged to “return production” of semiconductors to the United States by imposing a “100 percent tax” on their overseas production, claiming that tariffs would incentivize companies to manufacture chips in the US instead of Taiwan.

Despite this claim, Trump has yet to impose any tariffs on semiconductors.

Alongside the tax credit boost to the semiconductor industry, the Big Beautiful Bill has sweeping implications for the US renewable energy sector, rolling back most of the tax credits provided through the Inflation Reduction Act (IRA), which significantly boosted renewable energy development.

Should the bill become law, it would impose a 50 percent tax on wind projects and a 30 percent tax on solar projects completed after December 2027, if they cannot prove they haven’t used Chinese components.

It will also see the phase-out of clean electricity tax credits for construction beginning after 2032, the end of clean hydrogen production credit for projects starting construction after December 31, 2027, and the removal of the clean fuel production credit after 2029, two years earlier than initially proposed.