Texas Instruments Fights $48 Million Foreign Intangible Tax Bill - news.bloombergtax.com

Texas Instruments, a leading global producer of analog semiconductors, has filed a lawsuit against the U.S. Internal Revenue Service (IRS), claiming that the agency incorrectly adjusted its deductions... Read original →

Texas Instruments’ dispute with the IRS over FDII deductions reveals a fundamental flaw in the 2017 U.S. tax reform’s treatment of global semiconductor value chains. Technically, an IRS victory would pressure analog peers like ADI and Skyworks to reshore IP structures, inflating R&D costs and slowing automotive/industrial chip development. Compliance risk now permeates supply chains: foundries like TSMC (Taiwan, China) may face burdensome transfer pricing demands from clients, reducing operational agility. European rivals Infineon and STMicroelectronics could exploit this by deepening EU-centric IP frameworks to sidestep U.S. tax ambiguity. Within 18 months, this case will likely catalyze widespread restructuring of offshore intangible assets among U.S. C-corps and prompt Treasury revisions to Section 250—but until then, the sector faces elevated compliance overhead and strategic paralysis.