Trump set to delay, cut CHIPS Act payments

President Trump’s White House is looking to renegotiate US CHIPS and Science Act awards, according to a Reuters report.

Where and how large the cuts will be is not yet clear but Trump is reported to be frustrated with companies that have agreed major US government subsidies to build facilities in the US and then announced investment abroad, particularly in China.

Some of the overseas chip companies that are set to benefit under the CHIPS Act – TSMC, Samsung, SK Hynix – have chip manufacturing facilities in China. US chip giant Intel is set to receive almost US$8 billion under the CHIPS Act.

So far under the 2022 Act there has been the allocation, but so far little disbursement, of US$39 billion towards rebuilding the domestic semiconductor manufacturing base and securing the semiconductor supply chain.

Reuters said that the incoming administration is also opposed to certain terms in the subsidy contracts such as clauses requiring the use of unionized labor to build factories and the provision of childcare for factory workers.

“The CHIPS Program Office has told us that certain conditions that do not align with President (DoTrump’s executive orders and policies are now under review for all CHIPS Direct Funding Agreements,” Reuters reported GlobalWafers spokesperson Leah Peng saying in a statement. GlobalWafers is a Taiwanese manufacturer of silicon wafers.