Time-Sensitive: Biden Administration Rushes to Finalize Billions in CHIPS Act Deals
The clock is ticking for the Biden administration to finalize billions of dollars in CHIPS Act deals before the new administration takes office. With $39 billion in funding at stake, every minute counts. The CHIPS Act, signed into law in 2022, aimed to bring chip production back to the United States, securing supply chains and reducing reliance on Taiwan for advanced semiconductors.
A Critical Moment for U.S. Manufacturing
The stakes are high, as chips power everything from smartphones to cars. Falling behind in chip production is not an option for the United States. However, despite 90% of the funding being allocated, most of it remains unlocked. Only two deals, worth $6.6 billion, have been fully finalized, according to the Commerce Department.
Slow Progress Frustrates Industry Leaders
Commerce Secretary Gina Raimondo promised to allocate every dollar by the end of the year, but progress has been slow. Intel CEO Pat Gelsinger expressed his frustration, stating that the process has dragged on for over two years. The Biden administration is trying to speed things up, announcing a $6.6 billion deal with Taiwan’s TSMC last week.
Uncertainty Looms with Trump’s Presidency
However, President-elect Donald Trump has expressed his disapproval of the CHIPS Act, suggesting that tariffs are a better way to encourage companies to produce chips in the United States. His team may shift gears when he takes office, potentially slowing down or rewriting the rules. Analysts warn that this could add more uncertainty to an already complicated process.
Legally Binding Deals Provide Some Certainty
Once a CHIPS Act deal is finalized, it’s challenging to undo. These agreements are legally binding unless companies fail to meet their obligations. This provides some reassurance for companies like Intel, which is still negotiating terms to unlock its share of the funding.
The Pressure is On
With January fast approaching, the Biden administration knows that the window to finalize these agreements is closing. The next administration could stall or rewrite the rules, adding more uncertainty to the process. For Biden, it’s a race against time to solidify the vision of the CHIPS Act before Trump’s team takes over.
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