• Donald Trump has pledged to repeal the $52.7 billion CHIPS Act, which provides subsidies to boost U.S. semiconductor manufacturing.
  • The former president criticized the law, arguing that companies benefiting from it, like Intel, should invest without government aid.
  • The Biden administration has defended the subsidies as crucial for strengthening domestic chip production and reducing reliance on China.

U.S. President Donald Trump has announced plans to revoke the $52.7 billion CHIPS and Science Act subsidies that provides subsidies to boost U.S. semiconductor manufacturing.

The law, signed by former President Joe Biden in 2022, was designed to bolster domestic semiconductor manufacturing and reduce dependence on China.

This included $39 billion in subsidies for U.S. semiconductor manufacturing and related components along with $75 billion in government lending authority.

Trump criticised the subsidies asserting that major semiconductor companies, including Intel should invest their own funds rather than rely on government.

"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.

Trump suggested that the landmark bipartisan law, to give $52.7 billion in subsidies for semiconductor chips manufacturing and production, has to be revoked and the proceeds are to be used to pay off debt.

"You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt." Trump added. 
"We don't have to give them money".

Suggesting that avoiding new tariffs would be enough to convince them to build U.S. factories, Trump argued that market-driven incentives, rather than government subsidies, should determine the industry's growth and competitiveness.

Under President Biden, then-Commerce Secretary Gina Raimondo secured commitments from the world’s top five semiconductor firms to establish factories in the U.S. using government grants, aiming to reduce national security risks from imported chips.

In Biden’s final weeks in office, the Commerce Department finalized over $33 billion in awards, including $4.75 billion for South Korea’s Samsung Electronics, up to $7.86 billion for Intel, $6.6 billion for Taiwan Semiconductor Manufacturing Co., and $6.1 billion for Micron.

Edited by Harshajit Sarmah