While the Biden administration has invested billions in domestic semiconductor production through the CHIPS and Science Act, President Trump's return to the White House raises questions about the future of these projects. Trump has previously criticized the legislation, suggesting tariffs on foreign-made chips as a better alternative. Despite initial comments from Republican lawmakers hinting at potential repeal, industry experts remain optimistic that the CHIPS Act will largely remain intact, though some minor adjustments to its implementation are possible.
The Biden administration has awarded tens of billions of dollars under the bipartisan CHIPS and Science Act, passed in 2022, to boost domestic semiconductor production . However, President Donald Trump 's return to the White House has sparked speculation about the future of these projects. Trump criticized the legislation before the election, calling it 'so bad' during an October interview on 'The Joe Rogan Experience.
' He argued against sending billions of taxpayer dollars to 'rich companies' and suggested tariffs on foreign-made chips would be a more effective way to move production to the U.S. Republican House Speaker Mike Johnson initially hinted at a possible repeal of the CHIPS Act in November but quickly retracted his statement, saying it was 'not on the agenda for repeal.' Despite this, concerns remain. American Enterprise Institute Senior Fellow Claude Barfield expressed doubts about the seriousness of Trump's opposition to CHIPS funding, noting his tendency to make campaign promises he doesn't always keep. Barfield stressed the dangers and delusion of scrapping the CHIPS semiconductor 'fabs' funding, highlighting its strong support from Republican lawmakers, particularly in states benefiting from new facilities and jobs created by the Act.Interestingly, Trump's nominee for secretary of commerce, Howard Lutnick, reportedly assured outgoing Commerce Secretary Gina Raimondo during a staff meeting that he was committed to moving forward with the program. Meanwhile, at least one chipmaker appears confident about continued funding. Taiwan Semiconductor Manufacturing Co. (TSMC) CFO Wendell Huang stated the firm expects to receive the $6.6 billion awarded for building three facilities in Arizona. Intel, the primary beneficiary of the CHIPS Act, even mentioned the program when congratulating Trump on his inauguration. Industry observers anticipate the CHIPS Act to remain in place under Trump 2.0, potentially with some minor adjustments. Scott Lincicome, vice president of general economics and trade at the Cato Institute, suggests superficial changes to the law's enforcement but believes major alterations are unlikely. He cites Trump's historical support for onshoring semiconductor production, national security concerns regarding U.S. chip manufacturing, and the strategic importance of these projects in politically significant states. Lincicome concludes that the core funding figures of the CHIPS Act are unlikely to change, although some aspects related to implementation, such as mandated childcare for construction workers and DEI initiatives, might be revised.
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