Trump Administration Reviews CHIPS Act Subsidy Requirements, Delays Some Payments

The Trump administration is reportedly reviewing the conditions of the U.S. CHIPS and Science Act, with potential changes to subsidy requirements and delays in upcoming payments, according to sources familiar with the matter. 

Trump Administration Reviews CHIPS Act Subsidy Requirements, Delays Some Payments

The CHIPS Act, passed in 2022, aims to boost domestic semiconductor production with $39 billion in subsidies. However, the new administration is now reassessing the terms of these awards, which could impact major recipients like Intel, TSMC, Samsung, and Micron.

CHIPS Act Under Review

The White House is re-evaluating the terms of the CHIPS Act, including additional clauses added during the Biden administration. These clauses require recipients to use unionized labor for factory construction and provide affordable childcare for workers. The Trump administration is reportedly considering revising these requirements, though the extent of the changes and their impact on finalized agreements remains unclear.

GlobalWafers, a Taiwanese company set to receive $406 million in U.S. government grants, confirmed that the CHIPS Program Office has informed them of a review of certain conditions that do not align with President Trump’s executive orders and policies. However, the company has not been directly notified of any changes to their award terms.

Delays in Payments

Some upcoming CHIPS Act payments are being delayed as the administration reviews the program. Each award recipient has distinct terms and milestones in their agreements, and payments are typically tied to achieving specific goals. For example, GlobalWafers is set to receive subsidies only after reaching certain milestones in 2025.

Concerns Over Overseas Expansion

The Trump administration is also reportedly frustrated with companies that accepted CHIPS Act subsidies while announcing significant overseas expansion plans, particularly in China. While the law allows some investments in China, the administration views these moves as counterproductive to the goal of strengthening U.S. semiconductor production.

Intel, for instance, announced a $300 million investment in a Chinese assembly and test facility in October 2023, months after receiving a major CHIPS Act award. Other major recipients, including TSMC, Samsung, and SK Hynix, also have substantial manufacturing operations in China.

Industry Response

The Semiconductor Industry Association (SIA) has begun consulting members on how to improve the CHIPS Act program. David Isaacs, SIA’s vice president of government affairs, emphasized the importance of maintaining momentum in both manufacturing incentives and research programs. He expressed readiness to work with the Trump administration to streamline requirements and achieve the shared goal of bolstering U.S. leadership in semiconductor technology.

Executive Orders and Policy Shifts

Since taking office, President Trump has issued several executive orders aimed at dismantling diversity, equity, and inclusion (DEI) programs across the federal government and private sector. These policy shifts are now influencing the review of the CHIPS Act, with the administration seeking to align the program with its broader economic and industrial priorities.

What’s Next?

While the review is ongoing, it remains uncertain how the proposed changes will affect existing agreements. Companies like TSMC have stated they will continue engaging with the CHIPS Program Office but have not commented on potential revisions to their agreements under the Trump administration.

As the U.S. strives to strengthen its semiconductor industry, the outcome of this review could have far-reaching implications for both domestic production and global competitiveness.