According to Bloomberg, U.S. President Trump demanded the end of a bipartisan-backed $52 billion semiconductor subsidy program that has prompted companies such as TSMC and Intel to invest more than $400 billion in the United States.
On March 4, Trump lashed out at the US Chip and Science Act, calling it a “extremely bad bill.” He urged U.S. House Speaker Mike Johnson to repeal the bill and recommended that the remaining funds be used to reduce debt or any other aspect.
Trump’s remarks sparked applause in the U.S. Congressional Hall, and less than three years ago, the two parties unanimously passed the Chip and Science Act. Vice President JD Vance also stood up to support the repeal of the bill, even though his hometown of Ohio, United States, received huge investments from Intel for the bill.
As one of the most important industrial policies in the United States in recent years, the US Chip and Science Act allocated $39 billion in subsidy funds, plus loans and 25% tax incentives to revive the US semiconductor manufacturing industry, and also provided $11 billion in financial support for chip research and development. The US Chip and Science Act aims to reduce the U.S. reliance on Asian microelectronic components, which are relied on from microwave ovens to missiles.
Since both the Democrats and Republicans regard the US Chip and Science Act as the key to U.S. national and economic security, it is not easy for Trump to obtain votes to repeal the bill. Many Republican lawmakers have voted for the bill, and many Republican constituencies have also obtained factory construction or other projects.
Although Trump supports the overall goal of “improving the ability of domestic chip manufacturing in the United States”, he has always disagreeed with the passage of the US Chip and Science Act to achieve this goal. Instead, Trump advocates promoting corporate investment in the U.S. through tariff policies and suggests import tariffs on chips may begin next month, but provides no further details. On March 3, he attributed the “Taipei Messenger’s decision to add $100 billion in the United States” to potential U.S. tariff threats.
On March 4, Trump once again mentioned TSMC’s investment plan, which quoted the value as high as US$165 billion, including TSMC’s previous investment commitments. TSMC initially announced a $12 billion investment in Arizona during Trump’s first term, and later increased its investment commitment to $65 billion during the administration of former US President Biden to build three factories.
According to an agreement reached during Biden’s term, TSMC is expected to receive $6.6 billion in support through the Chip and Science Act to build the three factories.
Trump also told lawmakers on March 4: “We won’t give them any money.” It is unclear whether Trump refers to the U.S. government’s support for TSMC’s latest $100 billion investment commitment (this part is not within the scope of the U.S. Chip and Science Act subsidies), or whether it threatens to cancel the incentives that the U.S. government has promised. TSMC declined to comment on this.
Before Biden left office, 20 companies, including TSMC, had reached binding agreements on subsidies for the US Chip and Science Act.
These agreements account for more than 85% of the manufacturing incentive funds available in the U.S. Chip and Science Act program, and are designed to support advanced manufacturing facilities at companies such as TSMC, Intel, Samsung Electronics and Micron Technology, as well as traditional manufacturing plants at companies such as GlobalFoundries and Texas Instruments.
Overall, the business community generally believes that these agreements are legally binding and are not affected by changes in the U.S. government. But some companies are still worried that the Trump administration may try to modify the terms of the agreement, Bloomberg reported.
U.S. Commerce Secretary Howard Lutnick has said he cannot promise to fully fulfill these contracts without reviewing existing contracts on the U.S. Chip and Science Act. In addition, his intentions are still unclear. As of now, his inquiries to current staff have focused on the reasons behind chip appropriation decisions and the legal authority of the Trump administration to recover funds.