Trump’s Reelection Forces Mad Rush Among Chip Manufacturers to Secure Subsidies Before He Goes Back to the White House

Donald Trump will once again become president of the U.S. on Jan. 20, 2025. During his presidential campaign, he strongly criticized the Chips and Science Act, which was approved by the Biden Administration in July 2022. The federal statute allocates $52 billion specifically for companies involved in designing or manufacturing integrated circuits.

At the time, Trump argued that the CHIPS Act was ineffective, saying that if he won the election, he would instead impose tariffs to encourage companies to manufacture semiconductors in the U.S. He reiterated this position in October during an appearance on Joe Rogan’s podcast, saying, “We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here. They’re not going to give us the good companies anyway.”

It’s Time for Chipmakers to Take Action if They Want to Receive Funding

Currently, only one semiconductor manufacturer, Polar Semiconductors, has received the funds it’s entitled to from the Chips and Science Act, amounting to $123 million in subsidies. In contrast, other companies are still awaiting their payments, largely because they haven’t completed all the necessary procedures required for the government to evaluate their applications.

In this context, Trump’s reelection brings significant uncertainty to both the U.S. semiconductor industry and foreign chip companies. In fact, Trump’s return to the White House could disrupt the U.S. expansion plans of companies like TSMC and Samsung if the president-elect jeopardizes their access to the CHIPS funds they’re seeking.

As a result, some of these companies are now being pressured to expedite their applications to secure grant money before Trump’s inauguration.

TSMC and GlobalFoundries have recently finalized their agreements with the U.S. government. They’ll receive funding to build new chip manufacturing plants in the U.S. and expand existing facilities. On one hand, TSMC will obtain $6.6 billion in grants and up to $5 billion in loans to upgrade its new plants in Phoenix, Arizona.

GlobalFoundries, on the other hand, will receive $1.5 billion in grants and up to $1.6 billion in loans to construct a new integrated circuit factory in New York and expand its existing facility in Vermont. Additionally, it’ll benefit from $600 million from the State of New York.

The rush by these semiconductor companies comes at a curious time, coinciding with Trump’s reelection. Interestingly, they’ve had ample time to take advantage of this funding opportunity, and their previous criticisms of the CHIPS Act are publicly known.

Image | René DeAnda

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