Trump administration reportedly reconsiders CHIPS Act subsidies, touts TSMC as model

According to Reuters, US Secretary Of Commerce Howard Lutnick stated last Wednesday that President Donald Trump’s administration is revisiting certain semiconductor grants issued under former President Joe Biden, indicating that some of the awards could be withdrawn.

As noted by the report, Lutnick remarks that some Biden-era grants “just seemed overly generous” and says that the administration is working to renegotiate them with the goal of better serving American taxpayers.

Notably, Lutnick pointed to TSMC as an example of a successful renegotiation, highlighting that the chipmaker had increased its original US investment pledge from USD 65 billion to USD 165 billion.

In 2022, former US President Joe Biden signed the CHIPS and Science Act, allocating USD 52.7 billion to strengthen semiconductor manufacturing and research in the U.S. The program provides billions in funding to major chipmakers, including Taiwan’s TSMC, South Korea’s Samsung and SK hynix, and U.S. firms Intel and Micron.

Although the subsidies were approved, distribution had only just begun when Biden left office. The funds are expected to be released as companies advance their pledged expansions, the report notes.

TSMC confirmed receiving USD 1.5 billion in Q4 2024, but Commercial Times raises concerns that a second round of funding may not happen, putting the foundry giant’s remaining USD 5.1 billion in subsidies and up to USD 5 billion in loans at risk.

Potential CHIPS Act repeal could undermine major chipmakers’ US expansion plans
In March, President Trump urged lawmakers to repeal the CHIPS and Science Act, which has raised concerns about whether Intel will receive the remaining funds needed for its Ohio investment. Intel has so far received USD 2.2 billion of its approved USD 7.865 billion in CHIPS Act funding, with at least USD 1.5 billion allocated to its New Albany project in Ohio, The Columbus Dispatch indicates.

Repealing the CHIPS Act could also deal a major blow to South Korean chipmakers Samsung Electronics and SK hynix. According to The Korea Herald, Samsung has pledged over USD 40 billion to build two advanced chip fabs in Taylor, Texas, supported by USD 4.74 billion in direct funding from the Biden administration. SK hynix, which plans to invest USD 3.87 billion in a chip packaging plant in Indiana, has been promised up to USD 450 million in funding.

Source: TrendForce, Taiwan.