Future of CHIPS Act under Trump admin in question

The Biden administration has already awarded tens of billions of dollars under the bipartisan CHIPS and Science Act passed in 2022 for the purpose of boosting domestic semiconductor production, but President Donald Trump’s return to the White House has sparked speculation over the future of the projects.

Trump slammed the legislation ahead of the election, saying during his interview on “The Joe Rogan Experience” in October, “That chip deal is so bad.” The president criticized sending billions of taxpayer dollars to “rich companies” and suggested imposing tariffs on foreign-made chips would be a better way to move production to the U.S.

At the same time, several Republican lawmakers — particularly in states where CHIPS Act funding is supporting new facilities and jobs — voted for and support the initiative, and some close to Trump have signaled it will remain in place.

GOP House Speaker Mike Johnson told the press in November that Republicans “probably will” try to repeal the CHIPS Act, but quickly walked back his comments and said in a later statement that the legislation was “not on the agenda for repeal.”

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Trump’s nominee for secretary of commerce, Howard Lutnick, recently told outgoing Commerce Secretary Gina Raimondo during a staff meeting that he was committed to moving forward with the program, according to a report from Bloomberg last week, which cited people familiar.

Even if the CHIPS Act remains in place under Trump 2.0, some tweaks are expected.

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TechTarget reported that “industry watchers believe it’s more likely that Trump will put his stamp on the CHIPS Act by changing the Biden administration’s application guidelines,” suggesting some labor and environmental requirements for funding under the act could be nixed.

For now, at least one chipmaker appears confident that the Trump administration will continue funding its manufacturing projects in the U.S. Taiwan Semiconductor Manufacturing Co. (TSMC) CFO Wendell Huang told CNBC the firm expects it will still receive the $6.6 billion it was awarded to build three facilities in Arizona.

The chief beneficiary of the CHIPS Act, Intel, made sure to mention the program when congratulating Trump on his inauguration on Monday.

But as American Enterprise Institute Senior Fellow Claude Barfield wrote last month, it is anyone’s guess at this point whether the CHIPS Act will see changes.

“It is impossible to know at this point how serious Trump’s opposition to CHIPS funding will be when he takes over—he has often popped off during campaigns and not followed through later,” Barfield wrote in a scathing op-ed.

“In any case, his potential scrapping of the CHIPS semiconductor ‘fabs’ funding is both dangerous and delusional,” he wrote. “It also contradicts the policy adopted during his previous administration, when Trump officials began negotiations to bring foreign semiconductor manufacturing plants to the US.”