Background

The CHIPS Act, signed into law by Joe Biden in 2022, provides $52.7 billion in subsidies to semiconductor companies to encourage them to build and expand their manufacturing facilities in the US. The law is seen as a crucial step in reducing the country's reliance on foreign-made semiconductors and promoting domestic innovation.

However, Trump has long been critical of the law, citing its high cost and arguing that it benefits companies that do not invest in the US. He has threatened to impose a 25% tariff on all semiconductor imports, which could have significant implications for the industry.

Impact on the Industry

The potential repeal of the CHIPS Act has sparked concerns among semiconductor companies and industry experts. Many have warned that the move could lead to a decline in investments and a loss of competitiveness for US-based companies.

Companies such as Taiwan Semiconductor Manufacturing Co. (TSMC), Micron, Intel, Nvidia, and Samsung Electronics have already received subsidies under the law and have committed to investing billions of dollars in US-based manufacturing facilities.

The Semiconductor Industry Association has estimated that the CHIPS Act has sparked $450 billion in private investments in semiconductor production across 28 states, highlighting the law's potential to drive economic growth and job creation.