As President Trump turned to Congress last week, he left the script to attack a sensitive topic, The Chips Act, a bipartisan law that aims to make the United States less dependent on Asia for semiconductors.
Republican lawmakers had requested and received insurance over the last few months that the Trump administration would support the program that Congress created. But halfway through Mr. Trump’s words, he called the law a “terrible, terrible thing”.
“You have to escape the act of Chip,” he told President Mike Johnson while some lawmakers applauded.
The fried potato program was one of the few things to bring together most of Washington in recent years, as lawmakers on both sides of the line worked with private companies to design a receipt that would enter $ 50 billion to rebuild the US semiconductor industry, which makes the basic technology used to empower cars, computers and computers. After President Joseph R. Biden Jr. Signed it into law in 2022, companies found site in Arizona, New York and Ohio to build new factories. The Trade Department verified those plans and began to extinguish billions of dollars in grants.
Now, Mr. Trump is threatening to increase years of work. CHIP executives, worried that funds may be withdrawn, are calling lawyers to ask what room Wiggle has administration that the administration should terminate the signed contracts, eight people familiar with the claims said.
After the speech, Senator Todd Young, the Republican of Indiana who defended the chips, said he arrived at the White House to seek clarity about Mr Trump’s attack because the criticism was “in tension” with previous administration support.
“If it has to turn into another model for a period of time, I’m certainly a supporter of this,” Mr. Young said last week. “But let’s be clear, the act of chips and science, at least the part of the chips, is mainly implemented. It has been one of the greatest successes of our time.”
The United States pioneered the semiconductor industry, designing the first microcyps and processes to make them, allowing it to become an early technology leader. But in the 1980s, companies began to transfer most of its products to Asia.
US lawmakers began to pressure to rebuild the internal production of chips after the pandemia created a global shortage of chip that forced some US vehicle factories to close, resulting in the act of chips.
But the Trump administration has already taken steps to whitewash the program.
At the end of February, Michael Grimes, a senior official in the Department of Commerce and former Bank of Morgan Stanley, conducted short interviews with chips office employees, which oversees grants.
In the interactions, some described as “behavior”, Mr. Grimes asked employees to justify their intellect by providing test results from Sat or an IQ test, four people known to evaluations said. Some were asked to make mathematics problems, such as the calculation of the value of four in the fourth power or the long division.
Last week, the Department of Trade fired 40 of the chips office employees, nearly one -third of the whole team, these people said.
The administration has also begun discussing changes in projects that received chip -related subsidies, according to three people familiar with internal conversations. The Biden administration provided a preferential treatment for the recipients who employed united union workers and provided children’s care for employees, guidelines that can be changed, people said.
Reviews and dismissals were previously reported by Reuters and CNBC.
On Wednesday, the day after Mr. Trump’s speech, the semiconductor industry association organized a call with member companies, three people known for the discussion said. During the call, people deceived Mr. Trump’s disappointment with the law to animate personal with Mr. Biden.
Some said Mr. Trump’s criticism could create challenges by attracting public attention to their projects, according to people. But many also expressed confidence that their legal agreements with the Department of Trade cannot be changed.
The semiconductor association refused to comment.
So far, the Department of Trade has signed contracts to provide more than $ 36 billion in federal subsidies under the act of chips. Samsung, Intel, Micron, Taiwan semiconductor production company, known as TSMC, and others in response have pledged to invest hundreds of billions of dollars in the creation of US chip.
Mr. Trump has proposed replacing those incentives with tariffs that increase the cost of making chips overseas. On Tuesday, he said the threat of tariffs had forced TSMC, the world’s largest manufacturer of advanced semiconductors, to increase its US investments by $ 100 billion and double the number of plants it is building in Arizona to six.
“We don’t have to give them money,” Mr. Trump said. “We just want to protect our businesses and our people, and they will come because they will not have to pay fees if they build in America.”
It is unclear how much of a factor fee played in TSMC plans. The company had already won land and drafted plans to expand its footprint in Arizona after it had customers to support three additional plants, three people familiar with the chips. TSMC is investing earlier than it was previously planned, partly because clients like Apple and Nvidia committed to buy more chips made by the US, added people.
TSMC and Intel refused to comment. Micron and Samsung did not respond to requests for comment.
Lawyers and industry executives have said the tariffs for the chips themselves are not very effective because the United States imports some chips directly. Chips are usually sent directly to electronic factories, generally to Asia, where they are placed on laptops, cell phones and accessories before importing to the United States.
Some in the Chip Industry have formulated plans to prove to convince Mr. Trump about the value of the law since elections, including the annual industry meeting in San Jose, Calif., November. Initial legislation was partially driven by a request from officials during the Trump’s first administration that TSMC invested in the United States, which began an effort from Congress to secure funds for the company.
This was soon expelled in a wider effort to fund the industry, as other companies and lawmakers wanted to participate.
“We have to go and make sure that our colleagues in Washington remember that, embrace it and continue to invest in our extraordinary industry,” said Deirdre Hanford, the NATCast chief executive, a non -profit created by chips to oversee the development of semiconductor technology.
The risk of losing funds has led some industry executives to complain that the government was too slow to provide subsidies in the first place. As the law entered the country in August 2022, the administration Biden spent months carefully verifying each project. Most of its biggest grants were completed after the election.
“Is it perfect? No, “said Senator Mark Warner, a Democrat of Virginia, during a technology and policy conference in Washington last week.” But without it, there would be no other fabrication structure built in America. “