President Trump has launched a scathing attack on the $52 billion CHIPS Act, labeling it “a horrible, horrible thing” during his address to Congress. The Act, enacted in 2022, aims to boost domestic semiconductor manufacturing, research, and development in the US. Trump’s criticism has sparked concerns among industry experts and lawmakers, who argue that the Act is crucial for national security, job creation, and the country’s competitiveness in the global tech industry.
Trump’s main contention is that the Act’s subsidies are ineffective, claiming that companies take the money without spending it. He believes that tariffs on imports are a more effective way to bring semiconductor manufacturing back to the US. “We don’t have to give them money; we just want to protect our businesses and our people, and they will come because they won’t have to pay tariffs if they build in America,” Trump said.
However, industry experts disagree with Trump’s assessment. They argue that the CHIPS Act has already shown promising results, with several leading semiconductor manufacturers, including Intel, Samsung, Micron, and TSMC, committing to building new facilities in the US. These investments are expected to create thousands of jobs and stimulate local economies.
New York Governor Kathy Hochul and Arizona Representative Greg Stanton have both expressed concerns about Trump’s plans, highlighting the potential risks to their states’ economies. Hochul noted that the CHIPS Act is responsible for Micron’s $100 billion investment in Central New York, which is expected to create 50,000 jobs.
The CHIPS Act has also received bipartisan support, with lawmakers recognizing its importance for national security and the country’s competitiveness in the global tech industry. The Act aims to reduce the US’s reliance on foreign semiconductor supply chains, which are vulnerable to disruptions and security risks.
In contrast, Trump’s tariffs have been criticized for being ineffective in the long term. Jack Gold, principal analyst with J. Gold Associates, noted that tariffs become permanent without boosting manufacturing, whereas incentives are more effective in encouraging companies to invest in US capacity.
The fate of the CHIPS Act remains uncertain, with Trump’s administration already taking steps to dismantle it. The Commerce Department has laid off nearly a third of its staff overseeing the Act’s funds, sparking concerns about the program’s future ³. As the debate continues, one thing is clear: The CHIPS Act has become a contentious issue with far-reaching implications for the US tech industry and the country’s economic future.
