Trump yanks CHIPS Act cash unless tech giants pony up more of their own dough
- Reference: 1743515165
- News link: https://www.theregister.co.uk/2025/04/01/trump_chips_act_eo/
- Source link:
President Donald Trump has issued an Executive Order to establish a new office within the Department of Commerce titled the United States Investment Accelerator.
The office's aim is "to encourage companies to make large investments in the United States," and among its powers will be oversight of the CHIPS Program to maximize the benefits for taxpayers, the [1]White House states.
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This move follows earlier calls by President Trump [3]to scrap CHIPS Act funding entirely , and any remaining money to be allocated to cutting federal debt.
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According to [6]reports , Secretary of Commerce Howard Lutnick has indicated that he intends to withhold CHIPS Act grants already agreed in order to push the companies involved to substantially expand the projects they have planned.
The aim is to force semiconductor makers promised grants and subsidies for building new manufacturing facilities on American soil to invest even more, without increasing the size of federal grants. This follows the example of TSMC, which earlier this month pledged to [7]spend $100 billion to expand its US fabrication plants.
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However, that $100 billion figure disclosed by TSMC chief CC Wei during his meeting with Trump was merely an estimated price tag for plans the company had in the pipeline anyway. Intel's former boss, Pat Gelsinger, [9]also pointed out recently that while TSMC is building fabs in the US, it is keeping its research and development in Taiwan.
"If you don't have R&D in the US, you will not have semiconductor leadership in the US," Gelsinger said at the end of last week.
His old company finalized an agreement with the Department of Commerce in November to receive [10]up to $7.86 billion from the CHIPS Act , which would make it the largest beneficiary of the federal government's cash, if it actually receives it all.
[11]ASML will open Beijing facility despite US sanctions on China
[12]Trump says US should kill CHIPS Act, use the cash to cut debt
[13]TSMC promises $100B US expansion that Trump hails without clarifying chip tariff threat
[14]Intel slows its roll on $28B Ohio fab expansion, pushing production to 2030s
That was also conditional on Intel retaining control of its foundries, amid talk that the troubled Santa Clara-based biz was potentially [15]looking to spin them off as part of a restructure. Intel has since announced it is delaying some of its fab buildout, such as pushing back the [16]completion of its $28 billion Ohio plant until at least 2030.
Gelsinger had [17]previously stated that without CHIPS Act funding, Intel would continue to build new fabs in Arizona and Ohio, however the expansion would take longer, and it wouldn't be as comprehensive.
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Along with [19]import tariffs on chips , the tough approach the Trump administration is taking with semiconductor makers is likely to lead to more uncertainty in the tech industry. This has already [20]caused mayhem in the PC business , with costs increasing and customers [21]rethinking purchases .
Richard Gordon, Vice President and Practice Lead, Semiconductors, The Futurum Group, referred to AMD's Lisa Su's comments about the impact of tariffs, remarking that Su appeared to be "waiting to see how things pan out in the coming weeks / months before coming to any major conclusions ... and I think that's the only sensible way to deal with Trump."
Gordon added: "The threats about withholding CHIPS Act Funding are largely rhetorical and designed to keep up the pressure on the US semis companies IMO. I think the threats are unnecessary and won't make much difference because US companies are already rapidly re-shoring, as Lisa mentions...
"In terms of investment generally, it's always been my view that semis companies will invest regardless of government handouts because if they don't they won't be around for long. It's nice to have handouts and companies will gladly accept them (depending on the strings attached) but often they only serve to prop up weaker companies."
In addition to overseeing the CHIPS Act, the Investment Accelerator office will try to cut through bureaucracy to ensure that businesses can quickly deploy capital and create jobs, according to the White House.
"By streamlining processes, the Accelerator will attract both foreign and domestic investment, reinforcing America's position as the premier destination for large-scale investment," it claimed.
As well as scrapping some subsidies previously agreed, the Commerce Secretary may consider initiating a separate 25 percent tax credit from the CHIPS Act. ®
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[1] https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-establishes-the-united-states-investment-accelerator/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z-wNna1OlDU_Amfm2JV6uQAAAJM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2025/03/05/trump_speech_scrap_chips_act/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z-wNna1OlDU_Amfm2JV6uQAAAJM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z-wNna1OlDU_Amfm2JV6uQAAAJM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.bloomberg.com/news/articles/2025-04-01/us-chip-grants-in-limbo-as-lutnick-pushes-for-bigger-investments
[7] https://www.theregister.com/2025/03/04/tsmc_trump_arizona_investment/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z-wNna1OlDU_Amfm2JV6uQAAAJM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2025/03/28/gelsinger_tsmc_leadership_intel_board/
[10] https://www.theregister.com/2024/11/26/intel_chips_act_funding/
[11] https://www.theregister.com/2025/03/10/asml_to_open_beijing_facility/
[12] https://www.theregister.com/2025/03/05/trump_speech_scrap_chips_act/
[13] https://www.theregister.com/2025/03/04/tsmc_trump_arizona_investment/
[14] https://www.theregister.com/2025/02/28/intel_delay_ohio/
[15] https://www.theregister.com/2024/12/13/intel_foundry_spinoff/
[16] https://www.theregister.com/2025/02/28/intel_delay_ohio/
[17] https://www.theregister.com/2022/03/24/intel_chips_subsidy/
[18] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z-wNna1OlDU_Amfm2JV6uQAAAJM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[19] https://www.theregister.com/2025/02/04/nvidia_trump_tariffs/
[20] https://www.theregister.com/2025/03/19/tariffs_tech_channel_uncertainty/
[21] https://www.theregister.com/2025/02/27/trump_tariffs_pc_purchases/
[22] https://whitepapers.theregister.com/
Meh
The chips act seemed to have the problem backwards. It makes more sense to make this stuff where it is cheaper and easier. To bring them back surely making the the US cheaper and easier for business would be necessary. After that the subsidy model or the tariff model to try and entice/force business back might work out but the business environment surely needs to be there first or this will all fall over
Re: Meh
One of the main reasons for the CHIPS act is to ensure a stable and secure supply chain.
At the moment a lot of the processors that the US military and government want are made in foreign countries. Their largest supplier is a country called Taiwan, who China doesn't like being called a country because they'd be quite happy if we could all just agree that it's theirs. China frequently runs military exercises off the coast of Taiwan, and tends to throw a diplomatic hissy fit at countries that recognise Taiwan as a country.
Generally speaking, having an essential part of your supply chain in a disputed territory is thought to be... *checks notes* ... bad.
For many years, the western world has ignored problems like these. The thinking - what little of it that happened - was that the world was stable enough that the bad things could never happen, and that fixing the problem would mean the number would not go up for Wall Street. "Number go up" has been the most important thing for the ruling elites, so nothing was done about it.
The pandemic, followed by a ship being stuck in the Suez canal, focused minds on just how fragile things had become.
The CHIPS act is not supposed to be about quarter to quarter profit. Sure, it would be nice if the fabs made a profit. But it's supposed to be about re-invigorating an industry critical to national security.
Re: Meh
> The CHIPS act is not supposed to be about quarter to quarter profit
You just put your finger on why it has to go (from the Trumpian pov).
Re: AC
Yep. You've preached for the last 40 years that only profits matter, but now companies are supposed to do something you want...whilst ignoring corporate profits?
I mean, really, cognitive dissonance much??!
The companies will stick by their old game plan: Money, Money, Show Me the Money. They'll come back to U.S. production when it benefits their bottom lines, and not before . It is complete and utter ignorance to believe otherwise because it's, err, "you", telling them you have to. The Orange One's tiny little brain stem simply can't process that, so he lives in denial (and everyone who believes in him regarding this is, also, in denial).
Go ahead, cancel the CHIPS Act. And then tell them they'll need to pony-up more money. For what, exactly? Like the U.S. is the only market they can sell to?? The growth market is China and other growing economies in case you missed Intel's recent sales [collapse]. Why spend billions to get a step-up in a market that has stagnated for the past number of years? They'll just stay off-shore and U.S. customers will have to pay extra for those "tariffs", a tax by any other name, as those costs are passed down to the U.S. consumer. Meanwhile, they still get the benefit of cheaper production in other countries, for those sales in other countries.
Invest more, create higher production costs, try to ROI, make everyone pay. Versus keep cheap, make only customers in penalizing market pay. Can Carrothead do the math??
Re: Meh
@Philip Storry
"One of the main reasons for the CHIPS act is to ensure a stable and secure supply chain."
I do understand that is the purpose and that Biden/Trump are going about it in different ways for the same goal.
"The CHIPS act is not supposed to be about quarter to quarter profit. Sure, it would be nice if the fabs made a profit. But it's supposed to be about re-invigorating an industry critical to national security."
I also follow the rest of your comment as the reasoning and I wont dispute that either. But at this point where you say it isnt about quarter to quarter profit, there should also be an understanding that it shouldnt be done at any cost. Partly because the costs are artificially inflated in the US with tighter regulation but also things like energy costs. This is something Trump seems willing to address but that may be reversed again by the next president.
In a worse situation is the EU trying to do its own version of the Chips act but with more regulation and inflating energy costs worse than the US did. Thankfully the UK has stayed out of the chip fabs idea even if our idiot governments want to make the country unattractive to business.
Re: Meh
Don't know from personal experience. But back in the 1990s, I was told by several sources that semiconductors for the US military were manufactured in US to Military Specs and individually (as opposed to batch) tested. I doubt that's changed much for combat/operational critical gear. Office equipment? Don't know. Might well be Commercial Off The Shelf (COTS).
Pray . . .
Is Trump's administration using the words of Darth Vader now? "I Am Altering the Deal, Pray I Don’t Alter It Any Further."
If I'd got a deal agreed and someone new came in and said I'm tearing the previous deal up unless . . . I'd be going "Bye fuckwit".
Re: Pray . . .
Exactly. And yet he wants countries and businesses to sign deals with him. Would you risk it? His signature is not worth the paper it's printed on. You could hand him Greenland on a plate and tomorrow he might want Copenhagen too.
Even at our Brexity worse, we used the due process to exit. We didn't unilaterally suspend agreements. When our leaders broke the rule of law, our courts put them in their place.
Re: Pray . . .
They've already done that to Canada and Mexico, so this is a well-used playbook.
Not that the CHIPS Act was a brilliant piece of policy, but while Canada and Mexico can't exactly up sticks to some more hospitable location, chip makers may well find a better offer elsewhere, or just stay where they are.
MAIA?
Make America Irrelevant Again?