Former U.S. President Donald Trump has called for the repeal of the CHIPS and Science Act, arguing that the funds allocated for semiconductor manufacturing should be redirected to national debt reduction. His stance has drawn mixed reactions, particularly from those who see the act as essential to American technological competitiveness.
Trump’s Criticism of the CHIPS Act
During a speech to Congress, Trump criticized the 2022 bipartisan CHIPS Act, which provided $52.7 billion in subsidies to boost domestic semiconductor production. He argued that the act was wasteful, saying:
“Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it.”
He further suggested, “You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt.”
The Impact of the CHIPS Act on U.S. Manufacturing
The CHIPS Act was originally designed to strengthen semiconductor manufacturing in the United States, reducing reliance on foreign producers. It provided $39 billion in direct subsidies and an additional $75 billion in lending authority to encourage private investments.
During its implementation, major global chipmakers announced plans to build facilities in the U.S., securing government funding in the process. Over $33 billion in grants were awarded, including:
- $7.86 billion to Intel
- $6.6 billion to Taiwan Semiconductor Manufacturing Company (TSMC)
- $6.1 billion to Micron
These investments were expected to enhance national security by reducing dependence on foreign-made chips, which are crucial for technology, defense, and artificial intelligence.
Opposition and Potential Policy Changes
Trump’s call to scrap the CHIPS Act raises concerns about whether existing grant agreements will be honored. Some officials worry that his administration may attempt to invalidate contracts signed during Biden’s presidency, which could disrupt ongoing projects.
New York Governor Kathy Hochul responded strongly, saying, “The law is the reason Micron is bringing $100 billion and 50,000 jobs to Central New York. Trump just said he wants to get rid of it.”
Meanwhile, TSMC recently announced a $100 billion investment plan to build five additional semiconductor facilities in the U.S., suggesting that chipmakers remain committed despite political uncertainties.
Future of Semiconductor Investments in the U.S.
The semiconductor industry has become a key battleground in economic policy, with China and the U.S. competing for dominance. While Trump prefers tariffs over direct subsidies, many in the industry argue that government incentives play a critical role in ensuring the U.S. remains a leader in semiconductor manufacturing.
It remains to be seen whether the CHIPS Act will be repealed under Trump’s administration, or if his opposition is simply part of a broader policy shift aimed at reducing federal spending.