The bipartisan CHIPS Act, enacted during Biden’s time in office, aims to boost U.S. semiconductor manufacturing. Experts believe Trump’s administration will keep it mostly in place, though with some adjustments.
Trump has expressed a preference for tariffs over subsidies and tax credits to encourage domestic manufacturing. However, he may find it difficult to push for major changes to the CHIPS Act, given the support it has in Republican-controlled states like Ohio, Texas, and Arizona—states that backed him in the election. Recently, New York, a solidly Democratic state that supported Kamala Harris, also got included in the act’s provisions.
Analysts predict Trump will likely tweak the CHIPS Act by modifying some of the Biden-era application guidelines. These guidelines include requirements for childcare, the use of union labor, and commitments to environmental practices like using renewable energy. Alan Sykes, a law professor at Stanford University, suggests that the most feasible changes will focus on removing what he calls “progressive parts.”
Jack Gold, an analyst at J.Gold Associates, concurs, describing potential changes as minor. However, eliminating the union labor requirement would undermine efforts to ensure fair wages for construction workers. Gold emphasizes the importance of the money set aside to create jobs and enhance manufacturing in America.
Semiconductors play a crucial role in industries from defense to healthcare. Their strategic importance helped garner bipartisan support for the CHIPS Act. Gold points out that the act’s incentives are more effective than tariffs. Building state-of-the-art chip factories, which take several years and can cost between $20 billion and $40 billion, requires substantial financial backing. Without this support, chipmakers might just raise prices to cover tariff-related costs, impacting consumers across the board.
As the Trump administration is on the horizon, Biden’s team is racing to finalize CHIPS Act agreements with numerous companies. Over 20 companies, including Intel, Taiwan Semiconductor Manufacturing Co., and GlobalFoundries, are nearing completion on various deals.
Intel stands to benefit significantly, with plans for an $8.5 billion grant and $11 billion in loans to develop two new factories in Arizona and a semiconductor hub in Ohio. They’re committing to invest $100 billion over the next five years. Intel said they look forward to collaborating with the Trump administration on this vital initiative.
GlobalFoundries anticipates receiving $1.5 billion for two projects in New York, while TSMC is seeking $6.6 billion to support a massive investment in three factories in Phoenix.
Antone Gonsalves, an editor at large for TechTarget Editorial, covers industry trends crucial for tech buyers and has decades of experience in tech journalism, based in San Francisco.