Trump threatens to terminate the "Chip Act" $52 billion subsidy! TSMC, Intel, Samsung, and other 20 major factories may be affected

During the State of the Union address on 3/5, President Donald Trump publicly called for the repeal of the Chips and Science Act, terminating the $52 billion semiconductor subsidy program. He bluntly stated, 'This is a terrible policy,' and urged Speaker of the House Mike Johnson to cancel the bill and allocate the remaining funds to debt repayment or other purposes.

"Chip Act" promotes 400 billion investment, Trump doesn't foot the bill

The Chip Act, which took effect in 2022, aims to boost the U.S. semiconductor industry, reduce reliance on the Asian chip supply chain, and provide $39 billion in subsidies, loans, and 25% tax breaks, while investing $11 billion to support semiconductor research and development. Since the passage of the Act, it has attracted investments of over $400 billion from companies such as TSMC, Intel, Samsung, and Micron.

However, Trump disagrees with this and believes that tariffs are more effective than subsidies, as they can increase government revenue while achieving the goal of attracting overseas businesses back to the United States. He also warned that tariffs may be imposed on imported chips as early as next month, emphasizing that companies must establish factories in the United States if they want to avoid tariffs.

TSMC has promised to invest $16.5 billion, and the subsidy prospects are uncertain

TSMC originally announced during Trump's first term to build a $12 billion wafer fab in the United States, later expanded to three fabs under the Biden administration, with a total investment of $165 billion, and received $6.6 billion in subsidies and $5 billion in loans.

TSMC has received 1.5 billion US dollars in subsidies, but Trump did not clearly indicate whether he would recover the funds already distributed or cancel future subsidy commitments. U.S. Commerce Secretary Howard Lutnick stated that TSMC's recently announced additional three semiconductor fabs and R&D center would not receive federal funding support.

Taiwan and South Korean operators are concerned that there may be changes in the chip investment plan.

In addition to TSMC, Samsung and SK Hynix, (SK Hynix) originally planned to invest billions of dollars in Texas and Indiana, all of which rely on subsidies from the U.S. government.

However, some analysts point out that one of TSMC's advantages is Taiwan's 'cluster effect,' including lower labor costs, cheaper construction costs, and an abundance of technical talent. If the US cancels subsidies, it may exacerbate the uncertainty of setting up factories in the US, affecting long-term competitiveness.

Currently, 20 companies including TSMC, Intel, Samsung, Micron, and Texas Instruments (TI) have signed subsidy agreements under the 'Chip Act' with the Biden (Joe Biden) government, accounting for over 85% of the total amount of the act. Some companies originally believed that the subsidy agreements were 'not affected by changes in government,' but Trump's latest remarks have made some businesses start to worry about whether the contract terms will be modified.

The U.S. government is reviewing subsidy programs internally, and companies may reassess investments.

The U.S. Department of Commerce is reviewing the subsidy contracts under the "Chip Act," with Lutnick's focus on the legal basis for subsidy disbursement and whether the government has the right to recoup funds already paid. Sources revealed that the government is currently considering adjusting the subsidy application process internally to minimize the impact on businesses.

Another Taiwanese semiconductor company, GlobalWafers(GlobalWafers), has received a $406 million subsidy and plans to open a new plant in the United States. GlobalWafers stated that it is still committed to expanding the U.S. market, but if the U.S. government amends the "Chip Act," the company will reevaluate its investment plans, including U.S. market demand, product pricing, and whether to move production lines out of the U.S. to avoid potential tariffs.

The future of US chip policy is uncertain, and industry players continue to pay attention.

At present, Trump's attempt to abolish the "Chip Act" may face challenges, as many Republican lawmakers have supported the act, and many Republican-governed states have also received semiconductor investment cases. However, the Trump administration may still influence the industry by modifying contracts, terminating new subsidies, or imposing additional import tariffs.

Before the Trump administration further clarifies its policy direction, major semiconductor manufacturers such as TSMC, Samsung, Intel, etc., will continue to closely monitor the U.S. government's final decision on subsidy programs and evaluate future investment strategies.

(Trump's latest speech: The golden age of America is coming, strong governance, immigration policy, and tariff wars are fully opened)

This article Trump threatens to terminate the $52 billion subsidy for the "chip bill"! TSMC, Intel, Samsung, and other 20 major factories may be affected. It first appeared on Chain News ABMedia.