U.S. President Donald Trump announced his intention to repeal the CHIPs ACT during a joint session of the U.S. Congress on March 4 (local time). This legislation, passed in 2022 with bipartisan support, was designed to bolster the U.S. semiconductor industry by providing $52.7 billion in subsidies to encourage companies to build semiconductor manufacturing facilities in the United States. The act aimed to reduce the industry’s dependence on China, a critical component of the ongoing trade tensions between the two nations.
Trump criticized the CHIPs Act, stating, “We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it.” He urged House Speaker Mike Johnson to redirect the funds from the CHIPs Act to reduce national debt or for other purposes. Trump’s stance aligns with his broader economic philosophy of using tariffs rather than subsidies to incentivize companies to invest in the U.S. “All that was important to them was that they didn’t want to pay the tariffs, so they came and are building, and many other companies are coming,” Trump said.
The announcement has raised concerns among South Korean semiconductor companies, such as Samsung Electronics and SK Hynix, which are set to receive substantial subsidies in exchange for their large-scale investments in the U.S. under the CHIPs Act. The Biden administration had previously confirmed subsidies of $4.75 billion for Samsung Electronics and $458 million for SK Hynix. With Trump’s intention to repeal the act, there is growing attention on whether these companies will be affected.
During his election campaign, Trump described the CHIPs Act as a “terrible deal,” and he reiterated this sentiment in Congress, stating, “Your CHIPs Act is a horrible, horrible thing…You should get rid of the CHIPs Act and whatever’s left over, Mr. Speaker, you should use it to reduce debt. Or any other reason you want to.” He emphasized that companies are building production facilities in the U.S. not because of subsidies but to avoid tariffs. “All that was important to them was that they didn’t want to pay the tariffs, so they came and are building, and many other companies are coming,” Trump said, highlighting his belief that tariffs are a more effective tool for attracting investments.
The potential repeal of the CHIPs Act could have significant implications for international companies and the broader global semiconductor supply chain. Companies like Samsung Electronics and SK Hynix have made substantial investments in the U.S. based on the incentives provided by the act. The interconnectedness of global trade and investment decisions means that changes in U.S. policy could ripple across the international business landscape.
In a related development, following the inauguration of the Trump administration, Apple announced a $500 billion investment plan in the U.S., including an AI server manufacturing facility in Houston, Texas. Additionally, on March 3, TSMC Chairman and CEO C.C. Wei met with Trump and promised at least a $100 billion investment, signaling continued interest from major tech companies in expanding their U.S. operations.
