On Nov. 13 (local time), John Thune, a senator from South Dakota, was elected as the Senate Majority Leader in the Republican Senate leadership election, according to Reuters and other foreign media on Nov. 14. Senator Thune secured 25 votes in the first round and 29 votes in the second round, defeating Texas Senator John Cornyn, who received 24 votes in the second round. Rick Scott, a Florida senator who received overwhelming support from Trump supporters, only garnered 13 votes in the first round, reflecting the Republican Party’s move to check the pro-Trump line.

The semiconductor industry breathed a sigh of relief as Florida Senator Rick Scott, a pro-Trump figure, was defeated in the U.S. Republican Senate leadership election. This outcome is seen as avoiding the worst-case scenario amid growing uncertainties surrounding the CHIPS Act. The industry is reacting with relief as Senator Scott, who gained attention with the endorsement of Tesla CEO Elon Musk, was defeated. If Congress were to be entirely swayed by Trump’s influence, the possibility of amending the CHIPS Act or reducing subsidies could increase.

The Republican Party secured 53 seats in the Senate in this election and also gained a majority in the House. If Senator Scott had been elected, there were concerns that uncertainties regarding the CHIPS Act or the Inflation Reduction Act (IRA) would have intensified. With the Republican Party drawing a line against pro-Trump figures in this leadership election, there are predictions that Trump’s influence is less likely to unilaterally push for amendments to the CHIPS Act or subsidy reductions.

Seo Jung-gun, a professor of political science and international relations at Kyung Hee University, explained, “This election revealed that the Republican Senate is not yet a place where Trump loyalists can run rampant.” Although Senator Thune has taken on the leadership role, uncertainties about the CHIPS Act have not been completely resolved. Senator Thune had previously expressed a negative stance on the CHIPS Act during its introduction in 2022, stating that “government spending is becoming too high.”

Meanwhile, according to Bloomberg, the Biden administration is accelerating efforts to finalize subsidy agreements with semiconductor companies such as Samsung Electronics within its remaining term. Bloomberg, citing sources, reported that negotiations with some companies like TSMC are in the final stages, while Samsung Electronics and Intel are discussing details.

The CHIPS Act, enacted in 2021, aims to bolster semiconductor manufacturing and research in the United States by providing substantial subsidies and incentives to semiconductor companies. The role of the Senate Majority Leader is crucial in setting the legislative agenda and guiding party strategy. Mitch McConnell, the outgoing Senate Majority Leader, has been a significant figure in the Republican Party, known for his strategic legislative maneuvers and often contentious relationship with former President Donald Trump.

Donald Trump has maintained a strong influence over the Republican Party even after his presidency, with a faction of the party remaining loyal to his policies and rhetoric. This has led to internal conflicts within the party between pro-Trump figures and traditional conservatives. Rick Scott, a Florida senator and Trump loyalist, has been a prominent supporter of Trump’s policies and has received endorsements from influential figures like Elon Musk. His potential leadership was seen as a continuation of Trump’s influence in the Senate.

John Thune, a senator from South Dakota, is considered a traditional conservative within the Republican Party. His election as Senate Majority Leader is seen as a move towards maintaining some independence from Trump’s influence. The semiconductor industry is highly sensitive to legislative changes that could impact subsidies and incentives provided by the CHIPS Act. Stability and support from the government are crucial for the industry’s growth and competitiveness.

The Inflation Reduction Act (IRA) is another significant piece of legislation aimed at addressing various economic issues, including inflation. Changes to this act could also impact the semiconductor industry and other sectors. The Biden administration has been actively working to secure subsidy agreements with major semiconductor companies to strengthen the U.S. semiconductor supply chain. This includes negotiations with companies like Samsung Electronics, TSMC, and Intel.

The Republican Party’s internal dynamics and the balance of power in the Senate are critical in shaping legislative outcomes. The party’s stance on key issues like the CHIPS Act and subsidies can significantly influence the semiconductor industry’s future.