Could the next semiconductor breakthrough happen beyond Earth? US lawmakers are proposing incentives for orbital chipmaking as competition with China intensifies rapidly.
A bipartisan group of US lawmakers has introduced legislation to ensure semiconductor manufacturers operating in low-Earth orbit can access tax incentives under the CHIPS and Science Act, as Washington seeks to strengthen its position in the emerging field of space-based chip production.
The proposed Semiconductor Superiority Act, introduced in the Senate by Senators Michael Bennet of Colorado and Tedd Budd of North Carolina, would amend Section 48D of the CHIPS and Science Act.
The amendment would explicitly make infrastructure and equipment used for semiconductor manufacturing in low-Earth orbit eligible for the Advanced Manufacturing Investment Credit. Similar legislation was introduced in the House of Representatives in May 2026.
Supporters of the bill argue that the clarification would reduce uncertainty for companies developing semiconductor technologies in microgravity environments and encourage further private-sector investment.
The initiative comes amid growing international competition in advanced semiconductor manufacturing. According to congressional documents, the United States conducted semiconductor crystal growth experiments in orbit during the Skylab programme in 1973. China later became the first nation to manufacture integrated circuits from space-grown crystals in 1996 and has since developed chipmaking capabilities aboard its Tiangong space station.
Although existing provisions of the CHIPS Act may already cover orbital semiconductor production, lawmakers say explicit language is needed to provide certainty for investors and manufacturers.
Interest in space-based semiconductor manufacturing has increased due to research suggesting that microgravity conditions can produce higher-quality materials than those made on Earth.
The legislation also reflects concerns over the future of orbital manufacturing infrastructure. The International Space Station is expected to be retired in 2030, while commercial replacements remain under development. Lawmakers have warned that delays could leave China as the only operator of the space station capable of supporting semiconductor materials research and production.
Several private-sector initiatives are already underway, including projects by Aegis Aerospace, United Semiconductors and Space Forge to advance in-space semiconductor manufacturing technologies.
