US President Donald Trump has urged US lawmakers to revoke the 2022 bipartisan Chip and Science Act, which allocates $52.7bn in subsidies for semiconductor chip manufacturing and research.
The funds, however, should instead be used to reduce the national debt, he said.
Go deeper with GlobalData
In a speech to Congress, Trump said: “Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it.
“You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt.”
Passed with bipartisan support, the Chip and Science Act aims to bolster the domestic production of semiconductor chips through $39bn in grants and an additional $11bn for research and development.
However, Trump has expressed his preference for using tariffs to incentivise chip manufacturers to invest in the US rather than relying on government subsidies.
The potential levies on chips imports could be introduced as early as next month, according to Bloomberg.
Trump credited the prospect of these tariffs with Taiwan Semiconductor Manufacturing Company’s (TSMC) recent decision to invest an additional $100bn in the US.
This investment includes TSMC’s original $12bn plan announced during Trump’s first term and an increased commitment to $65bn for three factories under President Biden’s administration.
In a related development, the office within the US Commerce Department responsible for managing $39bn in subsidies for semiconductor manufacturing has laid off approximately one-third of its workforce, reported Reuters citing two sources familiar with the matter.
The layoffs affected around 40 staff members, with an additional 20 staff departed last week as part of the government’s deferred resignation programme.
