In August 2022, then President Joe Biden signed the CHIPS and Science Act, which included $39 billion in subsidies for semiconductor production in the United States.
On Tuesday, President Donald Trump stated that U.S. Congress ought to repeal a historic 2022 bipartisan law that provides $52.7 billion in subsidies for the creation and manufacturing of semiconductor chips, with the money raised going towards debt repayment.
“Your CHIPS Act is an absolutely awful piece of legislation. Hundreds of billions of dollars are donated, yet it makes no difference. In a speech to Congress, Trump claimed, “They take our money and they don’t spend it.” “You should get rid of the CHIPS Act, and whatever is left over, Mr. Speaker, you should use it to reduce debt.”
In August 2022, then-President Joe Biden signed the CHIPS and Science Act, which included $75 billion in government financing authority and $39 billion in subsidies for U.S. chip production and related components.
Trump’s remarks were his most forceful attack to date on the bipartisan CHIPS Act. Trump stated, “We don’t have to give them money,” implying that avoiding additional tariffs would be sufficient to persuade them to construct plants in the United States.
Although Howard Lutnick, the secretary of commerce, has lauded the program, he previously stated that he wants to evaluate awards that were finalized under Biden.
Then, in an attempt to address the national security threats posed by imported chips, Biden’s Commerce Secretary Gina Raimondo persuaded all five of the world’s top semiconductor companies to establish factories in the United States using government funding.
Over $33 billion in awards were finalized by the Commerce Department in the latter weeks of the Biden administration, including $4.745 billion for Samsung Electronics of South Korea, up to $7.86 billion for Intel, $6.6 billion for Taiwan Semiconductor Manufacturing Co., and $6.1 billion for Micron.
Trump might try to nullify legally binding grant agreements made under the Biden administration, according to some officials.
The law “is the reason Micron is bringing $100 billion and 50,000 jobs to Central New York,” New York Governor Kathy Hochul stated on Tuesday. Trump recently declared his desire to eliminate it.
Together with Trump, TSMC said this week that it intends to invest an extra $100 billion in the US, which will include the construction of five more chip plants in the country over the next several years.
At a White House event on Monday, Lutnick mentioned the $6.6 billion award for TSMC, but he also stated that the company is entitled for a 25% manufacturing investment tax credit, and the department does not intend to provide it with any more subsidies. TSMC announced last month that $1.5 billion of its reward had already been given to it.
Trump’s remarks, according to Representative Greg Stanton, were a “direct attack on Arizona’s semiconductor industry and tens of thousands of Arizona workers.” He claimed that without the law, TSMC would not have been able to invest $100 billion.
According to two people familiar with the matter, around one-third of the employees at the U.S. Commerce Department division in charge of $39 billion in manufacturing subsidies for chipmakers were let go this week.
Last month, Reuters reported that the projects awarded are being reviewed by the Trump administration, which has started a radical revamp of the federal government.
