us house passes 'big and beautiful' act: will it reshape the chip sector?
Washington, Friday, 4 July 2025.
the us house passed the ‘big and beautiful’ act. analysts are unsure how this will affect tech companies like nvidia and tsmc. the act modifies semiconductor manufacturers’ investment tax credits. the credit increases from 25% to 35%. the legislation may impact healthcare and immigration. some critics suggest nearly 12 million people could lose healthcare. the bill could encourage domestic chip production due to increased tax benefits.
Market response
The news of the amended ‘big and beautiful’ act had an immediate impact on the stock market [3][4]. On Wednesday, chip stocks collectively rose [3][4]. Taiwan Semiconductor Manufacturing (TSM) and Nvidia (NVDA) both saw their stock prices increase by approximately 3% [3][4]. Advanced Micro Devices (AMD) experienced a rise of about 2%, while Broadcom (AVGO) saw gains of nearly 2% [3][4]. Intel (INTC) was the exception, with its stock declining due to company-specific news, while other chip manufacturers and related companies saw their stock values increase [3][4].
Tax credit implications
The core of the ‘big and beautiful’ act involves raising the investment tax credit for semiconductor manufacturers from 25% to 35% [3][4]. This 40 increase is designed to incentivize domestic production [3][4]. The act aims to reduce the cost for semiconductor companies to invest in us-based manufacturing [3]. The increased tax credit, coupled with potential chip tariffs, makes establishing domestic chip production more attractive [3][4]. Daniel Newman, CEO of Futurum Group, noted that tariff threats are pushing semiconductor companies to expand their us manufacturing [4].
Political perspectives
The ‘big and beautiful’ act has drawn criticism from various political figures [2]. Representative Adam Smith believes the act increases the national debt and deficit to benefit the wealthiest americans [2]. Representative Pramila Jayapal described the tax and spending bill as a betrayal [2]. Senator Maria Cantwell expressed concerns that many americans will suffer due to the act, with rising costs of living for average families [2]. John Rico, Deputy Director of the Yale Budget Lab, stated the act would worsen the situation for low and middle-income americans [2].
Strategic considerations
The potential for increased tax benefits could improve project economics and accelerate timelines for companies already invested in us manufacturing, such as Intel and Micron [4]. TSMC’s Phoenix factory, which has already received funding from the ‘chips act,’ could also benefit if it chooses to expand its operations [4]. These incentives align with a broader strategy to encourage advanced semiconductor companies to establish facilities in the united states [3][4]. This initiative builds upon previous efforts by both the trump and biden administrations [4].