Supposedly the Trump Administration might keep the CHIPS Act around, which is great news. The CHIPS Act of course is a law that helps fund a revival in United States based semiconductor manufacturing and research. Numerous companies have been awarded cash, loans, and tax benefits. However not all of them have actually gotten the cash from the Federal Government yet. And there’s the problem.
The Trump Administration might have cut the funding that hasn’t been disbursed yet or a Republican held congress may have completely revoked the law leaving numerous companies out in the cold. Intel for example has already invested over $30 billion in US based initiatives and desperately needs its $8.5 billion cash infusion.
But that future may not happen now…
President-elect Donald Trump is unlikely to roll back the Biden administration’s CHIPS and Science Act, despite his campaign rhetoric on the bill, experts say.
The legislation, which provides incentives for chipmakers to set up manufacturing in the U.S., became a point of contention in the final month of the election cycle.
Trump criticized the bill and its price tag. House Speaker Mike Johnson, a Republican, then said that his party “probably will” try to repeal the law. Johnson later walked the statement back.
Still, the key Biden policy, which has massive implications for Asian chips makers like TSMC and Samsung, is likely safe in the near term, according to chip experts.
Despite signaling he’s “not thrilled” about the bill, Trump is probably not going to roll it back, Paul Triolo, senior vice president for China and technology policy lead at Albright Stonebridge, told CNBC’s “Squawk Box Asia” on Thursday.
“There’s support for this kind of onshoring of advanced manufacturing,” he added.
So that luke warm approval of the CHIPS Act may be the best we’re going to get out of the Trump Administration and a Republican held congress.
Ultimately the United States will need another, even larger, CHIPS Act to stimulate the entire semiconductor ecosystem necessary to eliminate our dependence on Asian manufacturers and suppliers. As I’ve mentioned before, we as a nation cannot continue to rely on Taiwan and China for all of our semiconductors and electronics. It is unsustainable and dangerous to the country.
The time for a healthy peaceful relationship with the Chinese Communist Party is over. We failed. They failed. It’s over. We now have to address the health of our nation in the event a conflict between the United States and China does in fact occur. And that’s exactly what the CHIPS Act is doing. Hopefully there will be another act to further deepen the ecosystem, but with a Republican congress that remains to be seen. Defending our nation through high tech manufacturing is probably not on their to do list.
Which is a pity. For a political party that goes on and on about domestic manufacturing and tariffs, you’d think they’d already be pushing to get as much electronics and semiconductor manufacturing back into the United States as fast as possible through direct funding.
Taiwan is going to be blockaded or invaded by China in future, Taiwan has 40% of the entire world’s fab capacity, this is a future disaster that we can prevent by acting NOW. We can no longer pretend that everything is fine, it’s time to act. CHIPS Act II needs to happen.