The future of the CHIPS Act under the Trump administration is in question
President-elect Donald Trump met Apple CEO Tim Cook, announced at his ‘Make America Great Again Victory Rally’ event, and said the CEO plans to invest in the USA, following DAMAC and Softbank.
The Biden administration has already provided tens of billions of dollars under the bipartisan CHIPS and Science Act passed in 2022 with the aim of boosting domestic semiconductor production, but the return of President Donald Trump to the White House has sparked speculation about the future of the projects.
Trump dismissed the law before the election, saying during an interview with “The Joe Rogan Experience” in October, “That chip deal is terrible.” The president criticized sending billions of taxpayer dollars to “rich corporations” and suggested that imposing tariffs on chips made in other countries would be a better way to move the product to the US.
Intel CEO Brian Krzanich speaks during a meeting with President Donald Trump at the White House on February 8, 2017 in Washington, DC. Krzanich announced a $7 billion investment to build a factory in Chandler, Arizona to manufacture advanced semiconductors. (Chris Kleponis-Pool/Getty Images/Getty Images)
GOP House Speaker Mike Johnson told reporters in November that Republicans would “probably” try to repeal the CHIPS Act, but quickly retracted his comments and said in a later statement that the law was “not on the repeal agenda.”
Then last month, American Enterprise Institute Senior Fellow Claude Barfield wrote a scathing op-ed, saying “It’s impossible to know yet how serious Trump’s opposition to CHIPS funding will be when he takes office—he’s often out during campaigns and not followed up on later.”
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“In any case,” continued Barfield, “[Trump’s] The potential defunding of CHIPS semiconductor ‘fabs’ is dangerous and deceptive.”
Barfield noted that the legislation was strongly supported by Republican lawmakers — especially in states where CHIPS Act funding supports new institutions and jobs.
Howard Lutnick, Chairman and CEO of Cantor Fitzgerald and Co-Chair of the Trump 2024 Transition Team speaks at a rally for former US President and Republican presidential candidate Donald Trump at Madison Square Garden in New York , Oct. 27, 2024 (ANGELA WEISS/AFP via Getty Images/Getty Images)
But Trump’s nominee for commerce secretary, Howard Lutnick, recently told outgoing Commerce Secretary Gina Raimondo during a staff meeting that he intends to move forward with the plan, according to a report from Bloomberg last week, citing people familiar with the matter.
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For now, at least one chipmaker seems confident that the Trump administration will continue to fund its manufacturing projects at US Taiwan Semiconductor Manufacturing Co. (TSMC) CFO Wendell Huang recently told CNBC that the company expects to receive the $6.6 billion it was awarded. building three facilities in Arizona.
The main beneficiary of the CHIPS Act, Intel, made sure to mention the program when congratulating Trump on his inauguration on Monday.
| A ticker | Security | Finally | Change | change % |
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Industry watchers expect the CHIPS Act to remain in place under Trump 2.0, save for some potential changes.
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Scott Lincicome, vice president of general economics and business at the Cato Institute, told FOX Business in an interview that his projections are likely to have superficial changes in the implementation of the law, but he sees major changes as unlikely.
President Joe Biden delivers a speech at the Intel Ocotillo Campus on March 20, 2024 in Chandler, Arizona. Biden announced $8.5 billion in government funding from the CHIPS Act for Intel Corp. to make semiconductors in Arizona.
“If you go back to 2020 when TSMC made its first announcement in Arizona, Trump was a big fan,” Lincicome said, noting that the first Trump administration worked behind the scenes to support TSMC’s efforts. “That was pre-CHIPS, but it’s basically the same thing.”
He pointed to Trump’s intentions to onshoring semiconductor manufacturing, the interest in national security related to manufacturing chips in the US, and the fact that the chip projects are in politically important regions.
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“I’ve put all that together, I don’t see the numbers changing in the CHIPS Act,” he said. “You might see some changes in how the Biden administration implements the law — you know, they had some crazy stuff in there, like mandating child care for construction workers, and there’s stuff related to DEI … and you can see those things being pulled.”
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