Benzinga | Jun 18, 2021 07:33AM EDT

US Senators Suggest 25% Tax Credit For Semiconductor Chip Production Boost: Reuters

* A bilateral group of U.S. senators proposed a 25% tax credit for semiconductor manufacturing investments, Reuters reported.

* Last week, the Senate approved $52 billion for production and research on semiconductors and telecommunications equipment. The approval included $2 billion earmarked for auto chips which had to opt for production cuts due to the semiconductor chip crisis.

* U.S. Commerce Secretary Gina Raimondo estimates the funding to lead to seven to 10 new U.S. semiconductor plants and generate over $150 billion in chip production and research investment, including state and federal governments and private-sector firms contribution.

* The tax credit could benefit chipmakers like Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM), NXP Semiconductors NV (NASDAQ:NXPI), Intel Corp (NASDAQ:INTC), and Micron Technology Inc (NASDAQ:MU).

* TSM has initiated the $12 billion chip factory construction in the Arizona site.

* The U.S. share of semiconductors and microelectronics production slipped from 37% in 1990 to 12 at present.

* Foreign subsidies accounted for 70% of the cost difference for semiconductor overseas production.

* Price action: INTC shares traded higher by 0.21% at $57.3 in the premarket session on the last check Friday.