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Since 1954, our economy, job quality, and national security have benefitted from the investment in and adoption of new technologies that have been partially fueled by companies being allowed to deduct research and development (R&D) expenses from their current year’s income. In 2022, the law that made this possible expired and Congressional action is needed immediately to restore long-standing incentives promoting American technological development. At this critical juncture, with severely strained supply chains and essential components in high demand, the loss of this important tax incentive for R&D is piling onto the layers of impediments for US businesses.

Time is not on our side. Due to inaction by Congress, companies involved in scientific support and enhancements have already been forced to change the way they expense key investments in R&D. This ill-advised policy is costing businesses at the forefront of American innovation more than $29 billion in 2022, and potentially $119.7 billion over the next five years.

There have been two attempts to have Congress reinstate the previous R&D tax deduction for the microelectronics industry: first, as part of the administration’s “Build Back Better” legislation, and second, within the CHIPS and Science Act. Unfortunately, the reinstatement of the R&D tax deduction did not make it into the final version of either bill.

As we see the increasing role future technology plays in our lives, the US must double down in its support of microelectronics. Penalizing critical investments in R&D, as the US tax law is now written, will plummet US national technology and security interests at the same time we are witnessing great growth in overseas technology leadership incentives.

The American Materials Technology Partnership (AMTP) is working with member companies to reinforce the future of made-in-America materials. Our members are leaders in innovation that will strengthen America’s long-term strategic advantage. Only by reinstating the tax deductions for R&D will they be able to position themselves to bring the newest technologies to market by developing new enhancements in flexible electronics, artificial intelligence, machine learning, quantum technology, and other fields. It is vital to US interests to have American companies at the forefront of these advancing technologies.

To preserve historic tax deductions aiding research and development going forward, Congress must act to roll back this change. All Americans stand to lose if we don’t act to protect the future of innovation. We urge elected officials to reverse the recent tax change so that businesses can continue to innovate, bolster the economy, and create well-paying jobs. Failure to act will cost well-paying jobs and reduce future innovation-directed R&D.

As manufacturing and business groups put a national spotlight on this issue, AMTP members are raising awareness for what’s at stake for US consumers and our way of life, in terms of how microelectronics R&D supports technologies we use in our homes and offices, on the road, in hospitals and health care facilities, and in support of national security.

Check back at this webpage soon, where AMTP will issue a new report: “Microelectronics in Our Daily Lives; Growing Consumer Use and Dependency on Microelectronics R&D and Innovation”


Dan Brewer is Executive Director of the American Materials Technology Partnership and Executive Vice President of Brewer Science, Inc., a global leader in microelectronic materials manufacturing. Brewer Science is a founding member of the Missouri Technology Alliance.