President Trump’s administration is set to reshape the U.S. CHIPS Act, potentially altering the landscape of semiconductor funding and industry dynamics.
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At a Glance
- Trump administration likely to maintain the CHIPS Act despite campaign rhetoric
- Potential modifications to fund allocation and priorities expected
- Establishment of Department of Government Efficiency (DOGE) to modernize federal technology
- Emphasis on removing ideological bias in AI development
- Slow distribution of CHIPS Act funds may face reassessment
Trump’s Technology Policy Overhaul
President Trump has issued a series of Executive Orders aimed at modernizing U.S. technology policy. A key component of this strategy is the establishment of the Department of Government Efficiency (DOGE), tasked with “modernizing Federal technology and software,” as stated by President Trump. This new department will incorporate the U.S. Digital Service to ensure technical expertise in executing its mission.
In a move to reassert American leadership in artificial intelligence, Trump rescinded Biden’s AI Executive Order and introduced a new one. The focus is on removing barriers to AI development while ensuring that AI systems “are free from ideological bias and social agendas,” according to the President. This approach necessitates ongoing dialogue with the tech industry to balance competitiveness and ideological neutrality.
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 legislation. The Act, which allocates nearly $53 billion for domestic semiconductor manufacturing and research, has been a contentious issue. Trump previously labeled it a “bad” deal, suggesting tariffs as an alternative to attract chip companies.
“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,” Trump said.
However, the bipartisan support for onshoring advanced manufacturing suggests the policy may remain largely intact. The Trump administration might instead seek to modify the bill’s priorities and fund allocation, similar to how previous administrations have reinterpreted existing policies.
Reassessing Fund Distribution
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.
The Trump administration’s approach to fund distribution may differ from its predecessors. There’s potential for a reassessment of how awards are allocated, with a focus on enhancing the U.S. semiconductor industry’s security and economic benefits. This could lead to delays in disbursing funds, posing challenges for companies and research institutions involved in semiconductor projects.
Future Outlook
As the semiconductor industry navigates this evolving landscape, companies may need to realign their operations and resource management to match revised funding timelines. The capital-intensive nature of chip manufacturing, coupled with historical disadvantages compared to heavily subsidized foreign competitors, underscores the importance of strategic policy decisions.
While Commerce Secretary Gina Raimondo set an ambitious goal for the U.S. to produce a fifth of the world’s advanced logic chips by 2030, production delays and financial issues may necessitate further policy interventions. However, experts doubt the Trump administration would support a second iteration of the CHIPS Act, suggesting a need for alternative strategies to maintain U.S. competitiveness in the global semiconductor market.
