U.S. President Donald Trump has called on Congress to “get rid of” the 2022 CHIPS and Science Act, arguing the semiconductor funding law funnels billions to foreign companies without meaningful returns for the U.S. Speaking during a joint address to Congress on March 4, Trump criticized the act’s $39 billion in semiconductor manufacturing incentives, particularly funds allocated to Taiwanese chip giant TSMC.
Trump targets TSMC
“We’re not giving them any money,” Trump said, referring to Taiwanese chipmaker TSMC. “Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars. It doesn’t mean anything. All that was important was they didn’t want to pay the tariffs.”
His remarks came soon after TSMC announced plans to expand its U.S. operations with three new fabrication plants, two advanced packaging facilities and a major R&D team center — an ambitious $165 billion investment. The company, which supplies semiconductors to Apple, NVIDIA, AMD, Broadcom, and Qualcomm, has already established a facility in Phoenix under the CHIPS Act but has faced repeated delays.
“You should get rid of the CHIP[S] Act and whatever’s left over Mr. Speaker, you should use it to reduce debt or any other reason you want to,” Trump said, addressing Speaker Mike Johnson.
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CHIPS Act faces political and industry scrutiny
Some of the money set aside for the CHIPS Act has already been distributed or signed into contracts, including $1.5 billion to TSMC. In 2022, the Semiconductor Industry Association said the act would strengthen American competition, insulating the country from supply chain risks stemming from geopolitical tensions. TSMC received the first major subsidy under the act.
In order to “get rid of” an act, Congress would have to write and vote on a new law to repeal it. A recent Bloomberg report suggests Trump plans to cut two-fifths of the staff at the CHIPS Act Office.
White House uses tariffs as strategic leverage
Last month, the Semiconductor Industry Association expressed tentative support for Trump’s positions regarding trade negotiations and tax incentives to support U.S. semiconductor manufacturing.
“We’re encouraged by President Trump’s goals of restoring U.S. trade leadership, promoting American strength in semiconductors, and reindustrializing our country,” SIA President and CEO John Neuffer wrote at the time.
“We understand tariffs are a tool in the trade policy toolbox. If not approached carefully, tariffs could make it significantly more expensive to develop and produce Made-in-America semiconductors and the many critical technologies they enable, including artificial intelligence.”
On March 4, the Trump White House put into effect a 25% additional tariff on all products from Canada and Mexico and a 10% additional tariff on all products from China, allegedly to cut down on drug trafficking.
“Tariffs are a powerful, proven source of leverage for protecting the national interest,” a White House statement announcing the tariff plan in February said.
In a statement last year, electronics retailer Best Buy told investors the additional costs on imports “will be shared by our customers.”