Trump plans to scrap the $52.7 billion funding for semiconductor chip subsidies, Reuters reports.
Former President Donald Trump has called for the repeal of a major 2022 law that provides $52.7 billion in subsidies for semiconductor manufacturing. Speaking to Congress on Tuesday, Trump criticized the CHIPS and Science Act, saying it wastes taxpayer money without delivering real benefits. He urged lawmakers to eliminate the law and redirect the remaining funds toward reducing the national debt.
Trump’s Strongest Opposition Yet
The CHIPS and Science Act, signed into law by President Joe Biden in August 2022, allocated $39 billion for U.S. semiconductor manufacturing and an additional $75 billion in government-backed loans. The law was intended to boost domestic chip production and reduce reliance on foreign suppliers.
However, Trump has consistently opposed the initiative, but his latest comments marked his most direct attack yet. “We don't need to give them money,” he said, suggesting that simply removing tariffs would be enough to encourage companies to set up factories in the U.S.
Impact on the Semiconductor Industry
Commerce Secretary Howard Lutnick has supported the subsidy program but stated that he plans to reassess the awards finalized under Biden’s leadership. Under former Commerce Secretary Gina Raimondo, the Biden administration successfully persuaded major semiconductor firms to establish U.S.-based factories to address security concerns over foreign chip dependence.
By the time Biden left office, the Commerce Department had already allocated over $33 billion in awards, including:
- $4.75 billion to South Korea’s Samsung Electronics
- Up to $7.86 billion for Intel
- $6.6 billion for Taiwan Semiconductor Manufacturing Co (TSMC)
- $6.1 billion for Micron Technology
Despite Trump’s objections, some officials worry that overturning the law could disrupt ongoing projects. New York Governor Kathy Hochul emphasized the law’s economic impact, citing that it was instrumental in Micron’s decision to invest $100 billion and create 50,000 jobs in Central New York.
TSMC’s Continued Investment
Interestingly, despite Trump’s opposition, TSMC recently announced a $100 billion expansion plan in the U.S., which includes the construction of five additional semiconductor facilities. While TSMC has already received $1.5 billion from the CHIPS Act, Lutnick clarified that no further subsidies are planned, although the company remains eligible for a 25% manufacturing investment tax credit.
Political Backlash
Trump’s remarks have sparked backlash from industry leaders and lawmakers. Representative Greg Stanton called the move a “direct attack” on Arizona’s semiconductor industry and the thousands of workers relying on it. He noted that TSMC’s $100 billion investment in Arizona would not have happened without the CHIPS Act.
Meanwhile, the U.S. Commerce Department, responsible for overseeing the $39 billion in manufacturing subsidies, recently laid off about a third of its staff. This comes as Trump’s incoming administration is reviewing all awarded projects as part of a broader government overhaul.
