Part IV—Advanced Manufacturing Investment Credit Under Section 48D

The advanced manufacturing investment credit is equal to 35% of the qualified investment with respect to any advanced manufacturing facility of an eligible taxpayer in the tax year, unless the facility was placed in service before 2026, in which case the credit rate is 25%. See

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Regulations section 1.48D-1 and P.L. 119-21, section 70308, for more information.

Caution: You cannot claim any advanced manufacturing investment credit for any tax year if the beginning of construction of the qualified property begins after 2026.

Eligible taxpayer. An eligible taxpayer is a taxpayer who isn’t a foreign entity of concern (as defined in section 9901(6) of P. L. 116-283), and hasn’t made an applicable transaction (as defined in section 50(a)) during the tax year.

Qualified investment. The qualified investment for any advanced manufacturing facility is the basis of any qualified property placed in service by the taxpayer during the tax year that is part of an advanced manufacturing facility.

Advanced manufacturing facility. Advanced manufacturing facility means a facility whose primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment. See Regulations section 1.48D-4.

Semiconductor. The term semiconductor means an integrated electronic device or system most commonly manufactured using materials such as, but not limited to, silicon, silicon carbide, or III–V compounds, and processes such as, but not limited to, lithography, deposition, and etching. Such devices and systems include, but are not limited to, analog and digital electronics, power electronics, and photonics; for memory, processing, sensing, actuation, and communications applications.

Semiconductor manufacturing. The term semiconductor manufacturing and the term manufacturing of semiconductors are synonymous and mean, semiconductor wafer production, semiconductor fabrication, or semiconductor packaging. The following terms have the following meanings in connection with semiconductor wafer production, semiconductor fabrication, and semiconductor packaging.

1. Semiconductor wafer production includes the processes of growing single-crystal ingots and boules, wafer slicing, etching and polishing, bonding, cleaning, epitaxial deposition, and metrology.

2. Semiconductor fabrication includes the process of forming devices such as transistors, poly capacitors, non-metal resistors, and diodes, as well as interconnects between such devices, on a wafer of semiconductor material.

3. Semiconductor packaging means the process of enclosing a semiconductor in a protective container (package) and providing external power and signal connectivity for the assembled integrated circuit and includes the process of assembly and testing of semiconductors and advanced packaging of semiconductors.

4. Assembly includes, but is not limited to, wafer-dicing, die-bonding, wire bonding, solder bumping, and encapsulation.

5. Testing includes, but is not limited to, probing, screening, and burn-in work.

6. Advanced packaging means a subset of packaging technologies that uses novel techniques and materials to increase the performance, power, modularity, and/or durability of an integrated circuit. Advanced packaging technologies include flip-chip, 2D, 2.5D, and 3D stacking, fan-out and fan-in, and embedded die/system-in-package (SiP).

Manufacturing of semiconductor manufacturing equipment. The term manufacturing of semiconductor manufacturing equipment means the physical production (in a manufacturing facility) of semiconductor manufacturing equipment, which is used by an advanced manufacturing facility engaged in the manufacturing of semiconductors.

Semiconductor manufacturing equipment. The term semiconductor manufacturing equipment means the highly engineered and specialized equipment used in the manufacturing of semiconductors and the subsystems that enable or are incorporated into the manufacturing equipment. Specific examples of semiconductor manufacturing equipment and subsystems that enable semiconductor manufacturing equipment include but are not limited to:

1. Deposition equipment, including Chemical Vapor Deposition (CVD), Physical Vapor Deposition (PVD), Electrodeposition, and Atomic Layer Deposition (ALD);

2. Etching equipment (wet etch, dry etch);

3. Equipment for epitaxial growth of transistor features;

4. Chemical-mechanical polishing equipment to planarize layers through the semiconductor fabrication process;

5. Lithography equipment (steppers and scanners of various light wavelengths, such as deep UV, extreme ultraviolet (EUV), photoresist coating, and developer tracks);

6. Equipment for producing ingots and boules, wafer growth equipment, wafer slicing equipment, wafer dicing equipment, and wire bonders;

7. Inspection and measuring equipment, including scanning electron microscopes, atomic force microscopes, optical inspection systems, wafer probes and optical scatterometer, and Energy Dispersive Spectroscopy;

8. Certain metrology and inspection systems to measure critical dimensions of the integrated circuit features throughout the fabrication process, detection and measurement of defects on the wafers during the fabrication process;

9. Ion implantation and diffusion/oxidation furnaces;

10. Specialty glass components including EUV mirrors and optical pathways, lenses and mirrors used in inspection equipment and other fabrication processes, and lens assemblies for wafer defect inspection;

14 Instructions for Form 3468 (2025)

11. Electrostatic chucks;

12. High performance pumps;

13. High purity quartz devices;

14. Ultra-high vacuum chamber components; and

15. Photomasks and light sources used in photolithography.

Qualified property. Qualified property includes any building or its structural components and all of the following.

• Property that is tangible property.

• Property that is allowed depreciation or amortization.

• Property that is constructed, reconstructed, or erected by the taxpayer or acquired by the taxpayer if the original use of the property commences with the taxpayer.

• Property that is integral to the operation of the advanced manufacturing facility. See Regulations section 1.48D-3(g) for more information.

Exception. Qualified property doesn’t include a building or a portion of a building used for offices, administrative services, or other functions unrelated to manufacturing.

Buildings or portions of buildings not excluded. Buildings or portions of buildings not treated as offices and that are considered related to manufacturing of semiconductors or semiconductor manufacturing equipment include buildings or portions of a building used for:

• Gowning to enter to and from a cleanroom environment;

• Monitoring operations and remote access of equipment;

• Functions performed by unit process engineers including developing, monitoring, updating and overseeing individual process recipes running on every tool in the facility to manufacture, measure and test wafers including access to relevant data, data analysis, modifications and updates to the process recipes on the tools;

• Functions performed by equipment engineers including overseeing tools to ensure proper operation by accessing data about the tool health and performance remotely adjusting the tool at workstations, and issuing work orders to the equipment and maintenance technicians from the workstations;

• Functions performed by test engineers including monitoring the electrical test data being collected from the wafers at certain points in their processing;

• Functions performed by yield and defect engineers including reviewing inspection data collected from wafers;

• Functions performed by metrology engineers including reviewing physical measurement data collected from the wafers;

• Functions performed by integration engineers that are responsible for the technology node and the end-to-end wafer process;

• Functions performed by facilities engineers including monitoring and controlling facilities systems; and

• Functions related to central utilities buildings, material handling and ultrapure water generation facilities, and computing (data center).

See Regulations section 1.48D-3(c) for more information.

Coordination with rehabilitation credit. The qualified investment with respect to any advanced manufacturing facility for any tax year can’t include the portion of the basis of any property that is attributable to qualified rehabilitation expenditures (as defined in section 47(c) (2)). See Regulations section 1.48D-1(c)(2) for an example.

Certain progress expenditure rules made applicable. Rules similar to the rules of section 46(c)(4) and 46(d) (as in effect on the day before the date of the enactment of P.L. 101-508) apply for purposes of the advanced manufacturing investment credit.

Line 1b Enter the basis of the qualified investment with respect to any advanced manufacturing facility (defined above) for the tax year.

Line 1c For property placed in service before 2026, multiply line 1b by 25% (0.25). For all other property, multiply line 1b by 35% (0.35).

Line 2 Patrons, including cooperatives that are patrons in other cooperatives, enter the unused investment credit from the advanced manufacturing investment credit allocated from cooperatives. If you are a cooperative, see the instructions for Form 3800, Part III, line 1o, for allocating the investment credit to your patrons.

Tip: See Cooperatives, earlier, for filing Form 3468 to report any unused credits from cooperatives.

Line 3 If you are a partnership or S corporation requesting elective payment with respect to the advanced manufacturing investment credit under section 48D(d)(2) (A), you must report the credit amount on line 3 and Form 3800, Part III, line 1o.