Trump Supercharges US Chipmakers with 35% Tax Credit—Biggest Boost in Decades

Semiconductor giants just hit the jackpot—Washington’s throwing free cash at them like it’s a Vegas buffet. The Trump administration jacked up tax credits for domestic chip production from 25% to 35%, a move that’ll have fab plants popping up faster than meme coins in a bull market.

Silicon Welfare or Strategic Masterstroke?

Critics call it corporate welfare for an industry already swimming in subsidies. Bulls argue it’s the only way to counter China’s semiconductor dominance—because apparently capitalism now means out-subsidizing your geopolitical rivals. Either way, expect earnings calls to suddenly feature more ‘patriotic’ capex announcements.

Wall Street’s Cynical Take

Meanwhile, hedge funds are already pricing in the inevitable loopholes—look for ‘AI-powered wafer polishing’ startups to emerge overnight. Because nothing says ‘national security’ like letting VC firms write off 35% of their speculative bets. The real winner? Accounting departments gearing up for creative tax optimization theater.

House Republicans threaten to block Senate bill

Despite getting through the Senate, the fight isn’t over. Trump’s bill now faces a new round in the House of Representatives, which passed its own version of the bill last month. TRUMP wants final approval by July 4, but that deadline might not hold up. Speaker Mike Johnson is facing resistance from his own party, and with the vote margins razor-thin, he can’t afford to lose more than three Republicans if every member shows up.

Andy Ogles, a Republican from Tennessee, said Tuesday on X, “I don’t work for the Senate parliamentarian. I work for the PEOPLE.” He called the Senate bill a “dud” and has already submitted an amendment to swap it with the House’s version.

Ralph Norman, another Republican from South Carolina, is also opposing the Senate’s text. Thomas Massie of Kentucky and Warren Davidson of Ohio, who both voted against the earlier House version in May, are expected to vote no again.

Andy Harris, a Republican from Maryland who chairs the House Freedom Caucus, didn’t vote for or against the bill last time. He just voted “present,” which gives no clear signal where he stands now. But if Johnson loses more than three Republican votes, the bill doesn’t pass, and the 35% credit never becomes law.

Trump rejects Biden’s chip policy and pushes tariffs instead

While Trump is trying to boost US fabs with tax incentives, he’s also gunning for Biden’s CHIPS Act, which focused more on giving out grants. Earlier this year, Trump called for that entire law to be repealed.

Republican lawmakers haven’t moved on that demand, but Commerce Secretary Howard Lutnick confirmed last month that the administration is in the middle of renegotiating some of the grant terms from Biden’s version.

Trump’s approach skips the handouts and leans hard on tariffs. His administration has launched an investigation into semiconductor imports, which could lead to new duties on foreign chip technology. That adds more pressure on companies that don’t want to deal with unpredictable trade costs. Instead, they’re now speeding up construction in the US to avoid that whole mess.

Major names like TSMC, Nvidia, Micron, and GlobalFoundries have already ramped up US projects in recent months. They want to make sure they’re in position to claim the credits before the 2026 deadline passes. Companies that miss that window don’t get the deal.

The Senate passed the bill with Vice President JD Vance breaking a 50-50 tie. But Johnson’s real challenge now is keeping his party together in the House. No Democrats are expected to support the bill, and with Republican objections growing, the odds are getting tighter by the hour. Trump is demanding the House push the bill through before Independence Day, but the numbers don’t lie—if even four Republicans vote no, the bill dies.

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