Trump Calls for Scrapping Semiconductor Subsidy Program
President Donald Trump has called for the termination of the bipartisan $52 billion semiconductor subsidy program, known as the CHIPS Act, despite that it attracted $400 billion in investments from companies like Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel Corp, Bloomberg reports.
“Your Chips Act is a horrible, horrible thing,” Trump declared during a prime-time address to Congress on Tuesday.
He urged House Speaker Mike Johnson to dismantle the legislation and allocate any remaining funds to “reduce debt or any other reason.”
The remarks were met with applause in the chamber.
The CHIPS Act, considered a landmark foray into industrial policy, earmarked $39 billion in grants, loans, and 25% tax breaks to revitalize American semiconductor manufacturing, alongside $11 billion for chip research and development. The initiative aimed to reduce US reliance on Asian suppliers for crucial electronic components.
Trump, however, has consistently criticized the program as a wasteful use of government resources, arguing that tariffs could achieve similar results while generating revenue. Some Republicans have also expressed interest in repealing provisions they deem “social.”
Companies like South Korea’s Samsung Electronics Co. and SK Hynix Inc. have committed to multibillion-dollar projects in Texas and Indiana, contingent upon funding and support from the US government.
Trump has suggested that import levies on chips could be implemented as early as next month. He has stated that companies could avoid these duties by establishing factories on US soil.
Previously, Trump attributed TSMC’s decision to invest $100 billion in the US, in addition to an earlier $65 billion commitment, to the threat of tariffs. He reiterated this claim during his address:
“We’re giving them no money. All that was important to them was they didn’t want to pay the tariffs.”
TSMC initially announced plans for a $12 billion US site during Trump’s first term and expanded that project to three factories under President Biden. To support these facilities, TSMC reached an agreement with Biden administration officials for $6.6 billion in CHIPS Act grants and $5 billion in loans. As with other CHIPS Act awards, funding is disbursed over time as TSMC meets negotiated project milestones. The company received $1.5 billion before Biden left office.
