Trump wants the US CHIPS Act killed and funds redirected to national debt
Last week, President Trump urged lawmakers to repeal the CHIPS and Science Act, a landmark bipartisan law that allocated $52.7 billion in subsidies for semiconductor manufacturing. Instead, Trump is calling for the funds to help reduce the national debt.
"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," Trump said in a speech to Congress. "You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt."
The CHIPS Act, signed into law in August 2022 by then-President Joe Biden, aimed to strengthen domestic semiconductor manufacturing to counter national security risks posed by reliance on imported chips. The legislation included $39 billion in direct subsidies and an additional $75 billion in government lending authority to incentivize chipmakers to build production facilities in the United States.
Trump’s latest remarks mark his strongest criticism of the CHIPS Act to date. He further suggested that imposing tariffs on foreign competitors, rather than offering subsidies, would be sufficient to encourage semiconductor companies to build US factories.
Potential impact on industry and investments
Commerce Secretary Howard Lutnick, a Trump appointee, has publicly praised aspects of the program but has indicated plans to review awards finalized under the Biden administration. The Biden Commerce Department had already committed over $33 billion in subsidies, including:
$7.86 billion to Intel
$6.6 billion to Taiwan Semiconductor Manufacturing Co. (TSMC)
$6.1 billion to Micron
$4.745 billion to South Korea’s Samsung Electronics
The future of these agreements now appears uncertain as Trump questions the necessity of such financial incentives.
New York Governor Kathy Hochul pushed back against Trump’s comments, arguing that the law has played a pivotal role in bringing high-value investments to the US "The CHIPS Act 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," Hochul stated.
TSMC’s expanding US investment
Ironically, Trump’s comments came just as TSMC, the world’s leading chipmaker, announced plans to invest an additional $100 billion in US chip facilities. This expansion includes building five more semiconductor manufacturing plants, further solidifying the US as a key player in global chip production.
Lutnick, speaking at a White House event earlier this week, acknowledged the significance of TSMC’s $6.6 billion award but emphasized that no additional subsidies were planned. TSMC has already received $1.5 billion from its allocated grant.
The path forward
Whether Congress will act on Trump’s call remains to be seen. However, you can be sure this is not the last time we will be hearing about Trump and the CHIPS Act.
