Chipmaking Incentives Safe Under Trump Administration
Despite campaign rhetoric, experts believe President-elect Donald Trump will not roll back the CHIPS and Science Act, a bipartisan legislation aimed at boosting US competitiveness in the semiconductor industry.
A Key Biden Policy
Signed into law in August 2022, the CHIPS and Science Act committed nearly $53 billion to invest in domestic semiconductor manufacturing and research. The legislation has massive implications for Asian chipmakers like TSMC and Samsung, which have already received billions of dollars in funding to set up manufacturing facilities in the US.
Trump’s Stance on the Bill
During his campaign, Trump criticized the bill, calling it a “bad” deal and arguing that his proposal to increase tariffs would attract chip companies for free. However, experts say Trump is unlikely to repeal the law, despite his reservations.
Support for Onshoring Advanced Manufacturing
According to Paul Triolo, senior vice president for China and technology policy lead at Albright Stonebridge, there is broad support for onshoring advanced manufacturing in the US. Triolo believes Trump will not roll back the CHIPS Act, despite signaling his displeasure with the bill.
Allocation of Funds
The allocation of the CHIPS Act has been slow, with most of the earmarked funds yet to be doled out. So far, the bill has attracted Asian chip makers like Taiwan Semiconductor Manufacturing Company and Samsung to build US facilities.
Trump’s Expected Approach
While Trump may want to modify and change some of the priorities of the bill and its fund allocation, he is expected to leave most of it intact. Adam Posen, president of the Peterson Institute for International Economics, believes Trump will try to reinterpret the bill to spread the money differently, but will not roll it back.
Industrial Policy vs. Tariffs
Posen notes that Trump’s approach may mirror what Biden did by leaving Trump’s China tariffs in place when he took office, despite pivoting to a more industrial policy-focused strategy. However, Posen expects Trump to focus more on expanding tariffs rather than industrial policy.
What’s Next for the CHIPS Act?
As the Trump administration takes shape, it remains to be seen how the CHIPS Act will be implemented and modified. One thing is certain, however: the incentives for chipmakers to set up manufacturing in the US are likely to remain in place.
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