Priyanka Tiwari
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On Tuesday former President Donald Trump suggested American politicians abolish a significant spending law from 2022 that subsidized semiconductor chip manufacturing by $52.7 billion, and instead redirect the funds to pay off national debt.
“Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars and it means nothing. They take our money, and they don't spend it,” said Trump during a speech at Capitol Hill. He continued, “My suggestion is to get rid of the CHIPS Act, and whatever is left over, Mr. Speaker, you should use it to reduce debt.”
In August of 2022, current President Joe Biden allocated $39 billion to increase American manufacturing of semiconductor components, as well as $75 billion to extend government loans, all of which was stipulated in the CHIPS and Science Act.
The remarks were Trump's bluntest defamation of the bipartisan CHIPS Act so far. Trump also added, “We don’t have to give them money,” saying that not having new tariffs would be enough to persuade these companies to build factories in the U.S. Secretary of Commerce Howard Lutnick has defended the initiative in the past – he even said he would like to reevaluate the grant awards that were set under Biden's administration.
While trying to mitigate national security threats posed by foreign silicon imports, Biden's Secretary of Commerce Gina Raimondo successfully lured all five multinational semiconductor companies to build their factories in the United States using government subsidies.
Towards the end of Biden’s presidency, the Commerce Department awarded Intel up to $7.86 billion, Micron $6.1billion, and Taiwan’s TSMC $6.6 billion, while also finalizing a large $4.745 billion deal with Samsung, bringing the total to over $33 billion.
Some Republicans have voiced worry that Trump might attempt to rescind the legally binding grant contracts made to American multinationals during Biden's term.
Kathy Hochul, the governor of New York, responded to Trump in a speech, stating, “This law is what is making Micron commit to bringing $100 billion and creating $50,000 jobs to Central New York.”
This week TSMC announced alongside Trump that the company’s newest plans for investment include an additional $100 billion for construction of five new chip producing facilities in the U.S. over the next few years.
Lutnick brought up the $6.6 billion grant to TSMC at a White House event on Monday, but remarked that the department did not intend to provide any new subsidies to TSMC, although it qualifies for a 25% Mfg. Investment Tax Credit. TSMC confirmed last month that it has received $1.5 billion of the award.
Representative Greg Stanton remarked that Trump's assertions were a “straightforward assault on Arizona’s semiconductor sector and the many Arizonian employees.” He added that TSMC would not have made the $100 billion investment without the law.
Two sources with knowledge of the situation informed that this week approximately one third of the employees within the U.S. Commerce Department office responsible for supervising $39 billion dollars of spending on subsidies for chip manufacturers were let go.
Last month, Reuters claimed that the new Trump administration, which is executing a deep-seated reorganization of the federal government, is looking into the awarded projects.
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