President Trump’s administration reevaluates the U.S. CHIPS Act, potentially reshaping the semiconductor industry landscape.
At a Glance
- Trump administration likely to uphold CHIPS Act despite campaign rhetoric
- Potential modifications to fund allocation and priorities
- Establishment of Department of Government Efficiency (DOGE) to modernize federal technology
- Focus on removing ideological bias in AI and strengthening digital asset economy
- Slow distribution of CHIPS Act funds, with Intel as largest beneficiary
Trump’s Technology Policy Overhaul
The Trump administration has initiated a series of strategic changes to modernize U.S. technology policy, with implications for the semiconductor industry and the CHIPS Act. President Trump issued an executive order establishing the Department of Government Efficiency (DOGE), aimed at updating federal technology and software. This new department will incorporate the U.S. Digital Service to ensure technical expertise in executing its mission.
In a move to reshape AI policy, Trump rescinded Biden’s Executive Order and introduced a new one focused on removing barriers to American leadership in AI. The President emphasized the importance of eliminating ideological bias, stating that AI technologies “are free from ideological bias and social agendas,” President Trump said.
The White House is renegotiating U.S. CHIPS Act awards and delaying some semiconductor funding disbursements under a review by the new Trump administration, according to sources.
The 2022 law, aimed at boosting domestic chip production with 39 billion in subsidies, is being… pic.twitter.com/vqmSEqFQAV
— Barrett (@BarrettYouTube) February 14, 2025
CHIPS Act: Continuity Amid Change
Despite campaign rhetoric criticizing the CHIPS and Science Act, experts believe the Trump administration is unlikely to roll back this significant legislation. The Act, which allocates nearly $53 billion for domestic semiconductor manufacturing and research, has been a contentious issue during the election cycle. However, the bipartisan support for onshoring advanced manufacturing suggests the policy will remain largely intact in the near term.
“We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here, and they’re not going to give us the good companies anyway,” Donald Trump said.
While Trump has expressed dissatisfaction with the Act, the administration may seek to modify its priorities and fund allocation rather than repeal it entirely. This approach could mirror how the Biden administration maintained Trump’s China tariffs while adjusting implementation.
Challenges and Future Prospects
The allocation of CHIPS Act funds has been slow, with significant amounts yet to be distributed. Asian companies like TSMC and Samsung have been offered substantial funding to build U.S. facilities, while Intel has emerged as the largest beneficiary, receiving $8.5 billion in funding. These investments are crucial as chip manufacturing is capital-intensive, and the U.S. has historically been at a disadvantage compared to foreign competitors with heavier subsidies.
Commerce Secretary Gina Raimondo’s goal for the U.S. to produce a fifth of the world’s advanced logic chips by 2030 faces challenges due to production delays and financial issues. Some experts suggest a second CHIPS Act may be necessary to achieve this ambitious target. However, it’s doubtful that the Trump administration would support such an initiative.
