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Trump’s Opposition to the Biden Chips Act: What It Means for Semiconductor Companies and Intel

Emilia Wright | March 6, 2025

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Trump’s Disdain for the Biden-era Chips Act: Implications for Semiconductor Makers

In a recent congressional address, former President Donald Trump expressed his stark opposition to the U.S. Chips Act, raising significant concerns within the semiconductor industry about the future trajectory of this pivotal legislation. His remarks have prompted industry analysts and investors to speculate on the implications for semiconductor manufacturers, particularly in relation to Intel Corp. (INTC).

The Future of the Chips Act in Question

During his address, Trump not only criticized the Chips Act but also highlighted a massive investment agreement with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). The world’s largest chip manufacturer has committed to investing $100 billion in U.S. factories, supplementing an already planned $65 billion investment. However, it’s crucial to note that this new agreement has not been facilitated through any allocations from the Chips Act, which had previously allocated $6.6 billion towards TSMC’s manufacturing operations in Arizona last November.

The repercussions of Trump’s position on the Chips Act are palpable in the semiconductor sector, particularly for Intel, which appears to be “left on the side of the road,” as noted by Robert Maire, President of Semiconductor Advisors. Following Trump’s comments, Intel’s shares fell by 2.4% on the following trading day, indicating investor unrest and uncertainty regarding the company’s future.

Intel’s Position and Industry Sentiments

Discussions between Intel Interim Chairman Frank Yeary and officials from the Trump administration have exposed concerns about the company’s position in the U.S. semiconductor landscape. Speculations circulate that TSMC has considered controlling portions of Intel’s manufacturing facilities, raising alarms about potential partnerships that might weaken Intel’s market position against its formidable competitor.

Despite speculation of impending obstacles, there have been positive reports regarding Intel’s new manufacturing process, dubbed “18a,” which is reportedly yielding promising results. Bernstein Research analyst Stacy Rasgon pointed out that many insiders believe the company is not in dire financial straits, as they are able to deliver on upcoming products, including the next chip line, code-named Panther Lake, expected to launch by year-end with high-volume production slated for 2026.

Is the Chips Act on the Chopping Block?

The Chips Act was initially instituted by Congress to propel the semiconductor industry toward bolstering manufacturing capabilities in the U.S. However, any attempts to dismantle it would necessitate a firmer legislative action, specifically a new act of Congress. Nevertheless, reports indicate that as much as a third of the staff within the Commerce Department, responsible for distributing funds from the Chips Act, have already been laid off.

Despite Trump’s animosity towards the Chips Act, Senate Minority Leader Chuck Schumer (D-NY) countered this sentiment, asserting that there remains strong bipartisan support in Congress for sustaining investments in the semiconductor sector and preserving the jobs they generate.

The Risks Ahead for Semiconductor Projects

Maire suggests a looming threat that projects originally promised funding at the tail-end of the Biden administration might not see the light of day under Trump’s tenure. Notable commitments made under the Chips Act include:

  • **TSMC** received $6.6 billion for its Arizona plants.
  • **Samsung Electronics Co. Ltd.** secured $4.75 billion for its plans to invest $37 billion in central Texas.
  • **Texas Instruments Inc.** garnered $1.61 billion, which is part of an $18 billion investment for two fabs and an R&D facility.
  • **Micron Technology Inc.** obtained $6.4 billion towards a hefty $100 billion investment for two high-volume manufacturing plants.

Despite the substantial government grants, analysts believe that the substantial capital expenditures (capex) were largely driven by the companies themselves, with the financial assistance acting as a mere supplementary incentive. Rasgon elaborated that the associated tax credits might, in fact, hold more significance for companies than the grants themselves.

Looking Forward: Uncertainties and Opportunities

Commerce Secretary Howard Lutnick has indicated a desire to reevaluate the awards established under the Biden administration. Trump has suggested reallocating any remaining Chips Act funds towards reducing U.S. national debt.

Analysts at Raymond James have voiced their opinion that the Chips Act is likely to remain intact, but additional grants could become less probable under the new administration. They also express concerns over potential adjustments to existing contacts, which could usher in new uncertainty and affect ongoing projects.

As the semiconductor industry braces itself for possible turbulence under Trump’s administration, stakeholders will need to monitor developments closely. The future of the Chips Act and its ripple effects on companies like Intel and others will undoubtedly shape the semiconductor landscape for years to come.