The CHIPS and Science Act is the U.S.’s largest effort to strengthen its semiconductor industry. Approved by the Biden administration in July 2022, the plan allocated at least $52 billion to companies involved in designing or manufacturing integrated circuits. However, not everyone supports the initiative.
President-elect Donald Trump has been a vocal critic, arguing that if elected, he would instead use tariffs to push companies to manufacture semiconductors domestically. In October, he reiterated this view on Joe Rogan’s podcast: “We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here. They’re not going to give us the good companies anyway.”
TSMC and Samsung Brace for Uncertainty
U.S. chipmaker Intel is expected to receive the largest sum from the CHIPS and Science Act. Unless Trump blocks it, Intel will receive $8.5 billion in grants. Following closely behind, TSMC and Samsung are slated to receive $6.6 billion and $6.4 billion, respectively, to support their U.S. expansions.
At least, that’s what the Biden administration promised these three companies. However, the companies have yet to receive the funds. So far, only Polar Semiconductor has received its promised amount—$123 million. With Trump poised to take office, TSMC and Samsung face significant uncertainty regarding their U.S. expansion plans.
Polar Semiconductor is the only company to have already received its promised funds under the CHIPS and Science Act.
TSMC is building three facilities in Phoenix to produce cutting-edge semiconductors. Samsung, for its part, is developing two state-of-the-art chip fabs in Taylor, though financial restructuring has delayed construction on the second plant. Despite differing financial situations, both companies are counting on funds from the CHIPS and Science Act to support their infrastructure plans.
According to Nikkei Asia, Rob Atkinson, president of the Washington, D.C.-based Foundation for Innovation and Information Technology, criticized the Biden administration’s delay in disbursing funds. “The Biden administration, to me, has made a fundamental mistake by not getting the money out the door. Why would you give the next administration a choice to not spend the money?” he said. The potential issue? President-elect Trump could backtrack on the plan, withholding the remaining CHIPS and Science Act grants. Foreign companies, with TSMC and Samsung at the forefront, could find themselves in a particularly disadvantaged position.
Image | TSMC
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