Chipping Away at the CHIPS Act

April 7th, 2025

Boyana Nikolova

The bipartisan CHIPS Act was brought into fruition in 2022, endorsed by legislators and business leaders alike. However, its future may be endangered, as President Trump has vowed to hack away at the big investments it finances. For industries like that of semiconductor manufacturing, the US may slip behind while other countries take advantage of that weaker investment. But what is the CHIPS Act to begin with and why is America worried about what comes next?

Also known as the CHIPS and Science Act, the law came into effect in order to put the US on par with an expanding Chinese tech industry. It pledged $280 billion in investments into domestic tech markets and specifically targeted semiconductor capacity, companies’ R&D (research and development) funds, and the creation of more national tech hubs. The act also indirectly helped the industry through promoting jobs and increasing demand for products. Throughout its course, it has created nearly half a trillion dollars in relevant investments and kept the US competitive with Chinese tech.

The businesses that once made use of this money no longer have a safe future, though. Publicly, Trump has denounced the CHIPS Act as a “horrible, horrible thing” that hasn’t helped Americans nor their economy. Apart from remarks like these, his administration may soon be taking action. Trump’s commerce secretary, Howard Lutnik, is believed to be considering withholding grant funding; this means that businesses dependent on CHIPS Act grants may be forced to delay projects or as hoped for by the Trump Administration, lobby and invest in the government first. Furthermore, one of Trump’s many executive orders involved the formation of an “investment accelerator” office, which will oversee the CHIPS program office and prioritize the benefits for taxpayers.

Trump’s proposed changes to the act might be nothing more than threats, but by now, many companies have adapted. Wolfspeed, a semiconductor company, has announced plans to become less reliant on CHIPS grants and instead, it will be seeking out new sources of funding. Other companies will be placing their bets on lobbying efforts. Already, numerous legislators and well-known Republicans (including the Ohio governor) have spoken out in the name of the CHIPS Act. Their advocacy may or may not be in the name of innovation, but for the sake of all involved business leaders, it’s clear that they aren’t willing to mess with the CHIPS Act.