Recently, concerns have arisen that US President Donald Trump may abolish chips and science laws. Citing Bloomberg, a report by the Liberty Times said that if the Trump administration revokes the Chips Act, U.S. semiconductor market share could fall to single digits.
As mentioned in the Bloomberg Report, the Washington-based Semiconductor Industry Association estimates that US semiconductor manufacturing capacity has tripled by 2032, with global market share increasing from 10% to 14%. However, without the chips method, the share could have fallen to 8% instead.
The report says that spending on semiconductor factories in the United States saw a massive surge in the passing of the Chips Act and the following months. Even businesses that did not receive government subsidies are benefiting from the overall growth of the US semiconductor ecosystem, as the report highlights.
Additionally, the CHIPS Act offers a substantial 25% tax credit for manufacturing projects. This, according to the report, will serve as a major federal incentive for most businesses in the program. In contrast, grants typically cover only 10% to 15% of project costs, as the report points out.
Uncertainty surrounding the future of the Chips Act
Regarding the potential repeal of the Chips Act, the report notes that the terms of the contract allow the government to delay payments or even allow funds to be collected under certain conditions.
The report states that Commerce Secretary Howard Luttonick, who currently oversees the implementation of the Chips Act, has not yet committed to endorsing existing contracts and is reassessing the currently planned investment.
Meanwhile, the report highlights that even if Lutnick amends certain agreements, the Trump administration remains legally required to use funds designated by Congress for the Chips Act. As stated in the report, lawmakers have already allocated US$39 billion to manufacturing incentives by fiscal year 2026.
Approximately 75% of the Chips Act grant funding will be awarded to four major producers of advanced semiconductors (Intel, TSMC, Samsung Electronics and Micron), as highlighted by Bloomberg. But Trump’s threat to abolish the Chips Act has raised concerns about the future of Intel’s new plants planned for Ohio, as pointed out in everyday economic news.
Trendforce’s latest findings reveal that TSMC has announced an increase in investments in advanced semiconductor manufacturing in the US, bringing together a total of US$165 billion. If the three newly planned fabs go on schedule, mass production is expected to begin after 2030. The US, which is actively expanding its advanced semiconductor capacity, is projected to hold 22% of its global market share by 2030.
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(Photo credit: White House)
Please note that this article quotes information from Liberty Times, Bloombergand Economy Daily News.
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