Trump’s Stance on the Chips Act: Implications for Semiconductor Manufacturers

The semiconductor industry is at a pivotal juncture, and former President Donald Trump’s recent address has underscored the deep-seated tensions surrounding the Biden-era Chips Act. As the semiconductor landscape evolves, the question remains: what does the future hold for major players like Intel amidst changing political winds?

Trump’s Dislike for the Chips Act

During a recent congressional address, Trump made his distaste for the U.S. Chips Act abundantly clear. His remarks set off alarm bells within the semiconductor community, particularly for companies that have relied on the funding and initiatives outlined in the Act. The Chips Act was originally created to spur domestic manufacturing and reduce dependence on foreign chip production, primarily from East Asia. However, Trump is vocal about his belief that this initiative may not serve America’s best interests moving forward.

TSMC’s $100 Billion Commitment

In a noteworthy turn of events, Trump highlighted a significant agreement with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). The world’s largest chip maker is set to invest a staggering $100 billion into expanding its U.S. operations, in addition to the $65 billion already committed

. Notably, this investment operates independently of the Chips Act’s funding framework, raising questions about the Act’s long-term viability and relevance.

Intel: A Company in Limbo

The uncertainty surrounding the Chips Act puts Intel Corp. (INTC) in a precarious position. There were hopes that Intel would secure a favorable deal with the Trump administration, elevating its status within the semiconductor manufacturing hierarchy. However, signs indicate that these negotiations may have stalled, and analysts are sounding alarms about Intel being left “on the side of the road.”

Despite a recent spike in Intel’s stock, fueled by speculative reports of positive developments concerning its next-generation manufacturing process, dubbed “18a,” Trump’s rhetoric has created clouds of doubt. Robert Maire, president of Semiconductor Advisors, expressed skepticism surrounding any potential collaboration between Intel and TSMC, stating that such a partnership lacks feasibility.

Concerns About Funding and Future Projects

As the Department of Commerce begins to alleviate workforce associated with administering Chips Act funds, the future of promised projects looks dim. The Chips Act was designed to stimulate domestic manufacturing and create jobs, yet, many within the industry remain skeptical about the actual realization of these benefits under the current administration.

Many analysts fear that deals solidified at the tail end of the Biden administration—such as those involving Samsung Electronics, Texas Instruments, and Micron Technology—may not receive funding under Trump’s watch. Chuck Schumer, Senate Minority Leader, voiced in a statement that this trajectory is unlikely to gain support in Congress, thus raising questions about the practicality of Trump’s intentions to dismantle these investments.

The Shift in Capital Expenditures

Analysts, including Bernstein Research’s Stacy Rasgon, argue that while the Chips Act provided some initial funding, the bulk of capital expenditures was already set in motion by the companies themselves. The essence of the funding—the tax credits attached to capital expenditures—may remain intact, which could prevent a total unraveling of the existing commitments.

A Divided Future for US Semiconductor Industry

Raymond James analysts recently suggested that the Chips Act is unlikely to be fully repealed, while acknowledging that new grants may be less likely moving forward. The future of existing awards could hinge on the political climate as Trump’s critiques serve as a validation for a reevaluation of agreements made previously.

As we look towards 2026, when Intel’s Panther Lake line is expected to hit the market, the semiconductor arena stands braced for turbulence. While the chips narrative has always shifted, the political undertones that drive these decisions will undoubtedly affect both emerging manufacturers and established giants.

Conclusion

The semiconductor sector is at a critical juncture. With Trump’s disapproval of the Chips Act, significant questions arise regarding funding, collaboration, and future investment in American manufacturing. As stakeholders await further developments, it’s evident that the dynamics of the semiconductor industry hang in a delicate balance between political will and economic necessity.