WASHINGTON—President Biden’s expansive infrastructure proposal includes $50 billion for the American semiconductor industry. The funding will go toward production incentives and research and design, say administration officials.

Biden’s plan, released last week, seeks to leverage bipartisan support on Capitol Hill to subsidize domestic manufacturing and chip research. The president's $2 trillion infrastructure plan would be paid for by raising the corporate tax rate to 28 percent from 21 percent and increasing taxes on companies’ foreign earnings.