US CHIPS Act is dead as tariffs are significantly better alternative for US taxpayers

In the grand industrial pageant of the 21st century, the CHIPS and Science Act was meant to be a triumphant American overture—the policy symphony that would restore silicon sovereignty to the heartland. Legislators imagined a new age of fabrication and design rising from the dust of Ohio and Arizona, paid for with public treasure and national optimism.

Instead, they produced a sluggish, politicized, and bureaucratically entangled mechanism—one that has failed to deliver a timely or efficient semiconductor renaissance.

Three years into its rollout, the CHIPS Act has largely ossified. It has become a repository for grand intentions and slow execution. Meanwhile, tariffs—long maligned as crude and archaic—have quietly proven to be a far more effective lever of industrial redirection. Without the pomp of ribbon-cuttings or political pageantry, they are reshaping supply chains, incentivizing domestic investment, and protecting American technology leadership at a fraction of the cost.

CHIPS Act awards: Politically guided, slowly delivered
The companies awarded the largest portions of CHIPS Act funding have received only a fraction of the promised capital. The structure of the Act ties disbursements to complex milestone approvals, and delays have become routine.

Intel, awarded nearly $8 billion, has so far received just $2.2 billion. TSMC, whose flagship Arizona fab was to be the crown jewel of the program, has similarly only drawn down about $1.5 billion. Other recipients like Samsung and Micron are still in early stages of construction or navigating regulatory hurdles.

The geography of these awards reveals an unmistakable political calculus. TSMC was awarded funds for its operations in Arizona, a perennial swing state. Intel’s footprint spans Ohio, Arizona, and Oregon—regions of intense electoral attention. 

Micron’s major project is in New York, while Samsung’s U.S. footprint is concentrated in Texas. These awards reflect not just national interest but a careful distribution of capital across politically valuable terrain. What was meant to be a strategic reshoring initiative has also functioned as a campaign-friendly redistribution tool.
    
Tariff-driven investment: A sharper, more efficient lever
While the CHIPS Act languishes in red tape and electoral choreography, tariffs have done their work swiftly, and with far greater clarity. Imposed on semiconductors and advanced electronics, tariffs have sent an unambiguous signal to the global tech industry: produce in the United States or pay the price. These economic signals have triggered an impressive round of domestic reinvestment. Companies that once lobbied for subsidies now rush to realign their supply chains with tariff-safe zones.

Fifty-two point seven billion dollars ($52.7) is the total cost of the CHIPS Act—a taxpayer outlay, whose returns are still uncertain. By contrast, a 100% tariff rate, while seemingly shocking on paper, could have a far less severe impact than many assume. 

The reality is that major wafer foundries including TSMC, Samsung, Intel, and integrated device manufacturers such as Texas Instruments and Micron have already pledged to expand their manufacturing presence in the United States.

Even in the analog segment, suppliers such as Analog Devices, NXP Semiconductors, and Microchip Technology operate hybrid production models that allow them to flexibly allocate U.S. factory capacity to meet domestic demand. This flexibility not only cushions the impact of tariffs but also makes the policy more likely to stimulate sustained domestic production rather than temporary political compliance.

A growing number of chipmakers are expanding or initiating new U.S. operations in direct response to tariff regimes. Apple’s manufacturing partners have committed to over $100 billion in additional investment, TSMC is accelerating its Arizona expansion, and Samsung is deepening its commitment to Texas-based image sensor production.

These moves are not the result of government handouts—they are rational responses to new cost structures imposed by tariffs. The U.S. consumer market remains too large to ignore, and the tariff wall too high to scale without concessions.

-- Kristian Castellano, Director of Marketing at The Information Network, USA.