President Donald Trump in his State of the Union address on Tuesday night called for Congress to undo the bipartisan CHIPS and Science Act approved by lawmakers in 2022 to, among other aims, provide up to $52 billion in funding to bolster the U.S. semiconductor industry.
“Your CHIPS Act is a horrible, horrible thing,” Trump said during his prime-time address. “We give hundreds of billions of dollars, and it doesn’t mean a thing. They take our money and they don’t spend it.”
Trump’s comment was met with widespread applause after he requested that House Speaker Mike Johnson, R-La., repeal the law and use “whatever’s left over” of the funding appropriated by Congress to “to reduce debt.”
The president then added that Speaker Johnson could also use the remaining funds for “any other reason you want to.”
Spurred by former President Joe Biden’s Executive Order 14080, the CHIPS and Science Act was approved by Congress and signed into law in August 2022. The law made up to $52 billion of funding available to incentivize semiconductor manufacturers to establish new manufacturing operations in the United States while providing companies with a 25 percent tax credit.
As of July 2024, the Biden White House tallied up a total of $395 billion of commitments to invest in U.S. semiconductor and electronics sectors over the life of the administration, including money being awarded under the CHIPS and Science Act.
The CHIPS and Science Act was a target on the campaign trail last year for Trump who disparaged the program as a waste of government funds, at one point saying that instead of providing companies funding incentives “you tariff it so high that they will come and build their chip companies for nothing.”
“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,” said Trump in his Tuesday night address while referencing a new $165 billion investment commitment from Taiwan Semiconductor Manufacturing Co (TSMC) – the world’s largest semiconductor manufacturer – to build five new fabrication facilities in Arizona.
TSMC is one of twenty companies that have received funding under the CHIPS and Science Act – with a flurry of activity toward the end of the Biden administration in anticipation of the Trump administration striking down the program – after it struck a deal with the Biden administration last year to receive $6.6 billion in direct funding.
Trump has frequently accused Taiwan of stealing the U.S. chip manufacturing business and has touted tariffs on semiconductor imports.
“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 Tuesday night. “That feel like it’s amazing.”
The president’s call to repeal the CHIPS and Science Act was criticized today, including by witnesses at a House Science, Space, and Technology’s Subcommittee on Investigations and Oversight hearing today who voiced concern in response to a question from Rep. Emilia Sykes, D-Ohio.
“I think it needs to be continued, and it’s really important for our innovation and security,” Jeffrey Stoff, president of the Center for Research Security & Integrity, said at today’s hearing.
