The CHIPS and Science Act, passed in 2022, was supposed to supercharge America’s semiconductor industry by providing $52.7 billion in subsidies to companies like Intel, TSMC, and Micron. The goal? Bring chip manufacturing back to the U.S., reduce reliance on foreign countries like China and Taiwan, and strengthen America’s tech leadership.
Now, the Trump administration is rethinking the whole thing—and possibly scrapping the CHIPS Act entirely. Let’s break down what’s happening and what it could mean for jobs, technology, and America’s future in semiconductors.
What’s Changing?
1. Trump Wants to Repeal the CHIPS Act
President Donald Trump has asked Congress to eliminate the CHIPS Act, calling it a wasteful government handout. He argues that instead of subsidies, tariffs on foreign chips would push companies to build factories in the U.S. naturally, without taxpayer money.
2. Delays in CHIPS Act Funding
The administration has put a hold on some of the subsidy payments, forcing companies to wait longer for funding they were promised. This means businesses like Intel and TSMC, which were planning to expand U.S. manufacturing, are now reconsidering their investments.
3. Major Job Cuts in the CHIPS Act Program
The federal office that oversees CHIPS Act implementation just lost nearly 40% of its staff. With fewer people running the program, there are concerns about how effectively the remaining funds will be distributed and monitored.
4. Tariffs Instead of Subsidies?
Trump’s team is pushing for higher tariffs on imported semiconductors, making foreign chips more expensive and encouraging companies to manufacture in the U.S. instead. While this could benefit American factories, it could also lead to higher chip prices for consumers.
What This Means for U.S. Technology and Jobs
1. Uncertainty for U.S. Chipmakers
Big semiconductor companies have already invested billions in building new factories in the U.S. If the CHIPS Act is repealed, many might slow down or stop construction altogether, affecting thousands of jobs.
2. National Security Concerns
The CHIPS Act was designed to make the U.S. less dependent on China and Taiwan for critical semiconductors. If funding is cut, America could fall behind in the global chip race, leaving the country vulnerable to supply chain disruptions.
3. Higher Prices for Tech Products
If tariffs replace subsidies, the cost of chips could go up, meaning higher prices for smartphones, laptops, and cars—all of which rely on semiconductors.
4. Political and Industry Backlash
Many lawmakers and industry leaders are pushing back against Trump’s proposal, arguing that the CHIPS Act is essential for U.S. competitiveness. Some companies, like TSMC, have even paused investment plans while waiting to see what happens.
The Bigger Picture
The CHIPS Act was supposed to revive American chip manufacturing and create high-paying jobs, but now its future is uncertain. If Trump kills the program, it could set back U.S. innovation, while China and other countries continue investing heavily in their own semiconductor industries.