Research and development (R&D) continues to drive the expanding market for semiconductor products in consumer electronics and most other industries. You can help manage the cost and risk involved by exploring tax incentives, given the extension of the R&D Tax Credit and the new Alternative Simplified Tax Credit (ASC) for 2007.

Initiatives that may be eligible for R&D tax incentives include:

• Product development in wireless, networking, micro-electro- mechanical systems, radio-frequency identification, memory and other markets
• Process development and integration including advanced lithography, copper interconnects, low k Dielectrics, metal gates, etc.
• 300mm process development and conversion

Whichever credit you explore, you must be prepared to defend reported R&D tax credits. The Deloitte Tax R&D team is a national practice of highly experienced tax professionals specializing in R&D tax incentives, and includes former senior officials with the Internal Revenue Service and Treasury who participated in drafting the legislation and regulations. These specialists can help you identify qualified R&D activities and assemble documentation to defend your claim, based on their extensive knowledge of the law and your industry.

The Deloitte Tax R&D approach includes a customizable tool that helps to automate the computation and information gathering, and a Quality Assurance team that reviews deliverables and computations.

For more information, see the attachment below.