Bipartisan Legislation Clarifies Section 48D Investment Credit Eligibility for Space-Based Semiconductor Manufacturing
WASHINGTON — Today, Congressman Vern Buchanan, Vice Chairman of the House Ways and Means Committee, Congresswoman Terri Sewell (D-Ala.) and Congresswoman Suzan DelBene (D-Wash.) introduced the Semiconductor Superiority Actto amend the Section 48D Advanced Manufacturing Investment Credit to explicitly include property and infrastructure for space-based semiconductor manufacturing, as first reported by Bloomberg Tax.
“Semiconductor materials manufactured in low-Earth orbit will be a critical component of the next-generation semiconductor chips that will power U.S. leadership in AI, quantum computing and advanced defense systems,” said Buchanan. “My Semiconductor Superiority Act will ensure U.S. companies developing cutting-edge semiconductor technologies in space can access the same incentives already available for semiconductor production here on Earth. It will strengthen Florida’s position as a national leader in the space economy and keep America ahead of China in the race for technological and space dominance. By supporting next-generation semiconductor innovation, we can bolster national security, create high-paying jobs and cement America’s leadership in the industries of the future.”
“Alabama has long been at the forefront of American innovation and advanced manufacturing,” said Sewell. “As our global competitors race to dominate the technologies of the future, Congress must ensure that the United States remains the world leader in semiconductor production, space exploration, and cutting-edge research. The Semiconductor Superiority Act is an investment in American ingenuity that will help strengthen our national security, support high-paying jobs, and position the United States to lead in emerging industries. I’m proud to join my colleagues on this bipartisan legislation to ensure America sets the pace for the next generation of technological innovation.”
“The United States must continue leading the way in developing and manufacturing the next generation of advanced semiconductors. We’ve made tremendous progress ramping up domestic capacity through the CHIPS and Science Act, but the semiconductor race is constantly evolving,” said DelBene. “The next frontier of chipmaking is space, where the absence of gravity enables superior semiconductor development. By incentivizing the investment in these critical technologies, the U.S. will continue to shape the future of the global economy. This legislation provides the certainty researchers and innovators need to manufacture cutting edge semiconductors. This is a smart, forward looking step that strengthens U.S. leadership and keeps America at the forefront of technological competitiveness.”
Buchanan’s Semiconductor Superiority Act aligns with President Trump’s December 2025 Executive Order “Ensuring American Space Superiority,” which includes directions for the Trump Administration to “[grow] a vibrant commercial space economy through the power of American free enterprise;” “[foster] economic growth, attracting at least $50 billion of additional investment in American space markets by 2028;” “[spur] private sector initiative and a commercial pathway to replace the International Space Station by 2030” and “use emerging technologies and scientific discoveries to advance mission capabilities, and enable scientific discovery for America’s long-term science and technology leadership.”
Section 48D of the Internal Revenue Code provides a tax credit to incentivize U.S. semiconductor manufacturing. While Section 48D can be read to include next-generation semiconductor technologies developed in low-Earth orbit, it does not mention them explicitly. Buchanan’s bill clarifies Section 48D to clearly cover space-based semiconductor manufacturing, reducing uncertainty for American manufacturers.
Microgravity environments in space enable superior semiconductor fabrication by reducing defects in crystal growth and material deposition. These conditions are essential for next-generation chips powering quantum computing, AI and advanced defense systems. Without policy adaptation, the U.S. risks falling behind global competitors investing in space-based manufacturing. China is currently developing semiconductor materials processes on its Tiangong Space Station.
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