The future of the CHIPS and Science Act, designed to boost domestic semiconductor production, hangs in the balance as President Donald Trump returns to the White House. After previously criticizing the legislation, Trump's administration faces pressure from both sides of the aisle regarding its commitment to the program.
The Biden administration has already awarded tens of billions of dollars under the bipartisan CHIPS and Science Act passed in 2022, aimed at bolstering domestic semiconductor production . However, the return of President Donald Trump to the White House has ignited speculation regarding the future of these projects. Trump had fiercely criticized the legislation prior to the election, declaring in an October interview on 'The Joe Rogan Experience' that 'That chip deal is so bad.
' He argued against allocating billions of taxpayer dollars to 'rich companies,' proposing tariffs on foreign-made chips as a more effective strategy to shift production to the United States.Republican House Speaker Mike Johnson initially hinted at a potential repeal of the CHIPS Act in November, stating that Republicans 'probably will' pursue this. However, he quickly retracted his remarks, clarifying in a subsequent statement that the legislation was 'not on the agenda for repeal.' Last month, Claude Barfield, a Senior Fellow at the American Enterprise Institute, penned a scathing op-ed, expressing uncertainty about the seriousness of Trump's opposition to CHIPS funding upon assuming office, noting his tendency to make impulsive statements during campaigns that often went unfulfilled. Barfield emphasized the inherent dangers and delusion of potentially scrapping the CHIPS semiconductor 'fabs' funding, highlighting the strong bipartisan support for the legislation, particularly from states where CHIPS Act funding is driving new facilities and job creation.Despite the uncertainty, Trump's nominee for Secretary of Commerce, Howard Lutnick, reportedly affirmed his commitment to advancing the CHIPS program during a staff meeting with outgoing Commerce Secretary Gina Raimondo, according to a Bloomberg report citing unnamed sources. At least one chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), appears confident in the continued funding of its manufacturing projects in the U.S., with CFO Wendell Huang recently telling CNBC that the firm anticipates receiving the $6.6 billion awarded to construct three facilities in Arizona. Intel, the primary beneficiary of the CHIPS Act, prominently mentioned the program when congratulating Trump on his inauguration. Industry analysts predict that the CHIPS Act will largely remain intact under Trump 2.0, with possible minor adjustments. Scott Lincicome, Vice President of General Economics and Trade at the Cato Institute, suggests that superficial changes to the law's enforcement are likely, but major overhauls are improbable. Lincicome points to Trump's previous endorsement of semiconductor production on American soil, his national security concerns regarding manufacturing chips domestically, and the politically significant locations of these chip projects. He concludes that the core funding figures of the CHIPS Act are unlikely to change significantly, although some aspects of the Biden administration's implementation, such as mandatory childcare for construction workers and DEI-related provisions, might be revised
CHIPS Act Donald Trump Semiconductor Production Taiwan Semiconductor Manufacturing Co. Intel Bipartisan Legislation Foreign Tariffs National Security Economic Policy
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