While President Trump spoke to the congress last week, he threw the script to attack a sensitive subject, The Chips Act, a two -part law aimed at the United States less dependent on Asia for semiconductors.
Republican legislators had requested reassurance in recent months and received that the Trump government would support the program of the program. But halfway through the comments of Mr. Trump he called the law a “terrible, terrible thing.”
“You should get rid of the chip act,” he told speaker Mike Johnson, while some legislators applauded.
The Chips program was one of the few things to unite a lot from Washington in recent years, because legislators worked with private companies on both sides of the aisle to establish a bill that would set up $ 50 billion to rebuild the American semiconductor industry, using the fundamental makers. After President Joseph R. Biden Jr. It had signed the law in 2022, found companies in Arizona, New York and Ohio to build new factories. The Commerce department has screened those plans and began to carry out billions of dollars in subsidies.
Now Mr. Trump threatens to increase work for years. Executives of chip companies, which are concerned that financing can be rolled back, calls lawyers to ask which wiggle room has the administration to terminate signed contracts, said eight people who are familiar with the requests.
After the speech, Senator Todd Young, the Republican of Indiana, who defended Chips, that he reached the White House to seek clarity about Mr Trump's attack because the criticism was “in tension” with the earlier support of the administration.
“If it has to be converted into another model for a certain period, I will certainly support that,” Mr Young said last week. “But let's be clear, the chips and science act, at least the chip section, is usually implemented. It has been one of the greatest successes of our time. “
The United States pioneered in the semiconductor industry, designs the first microchips and the processes to make them, making it an early technical leader. But in the 1980s, companies started out to outsource the most production to Asia.
The American legislators began to urge to rebuild domestic chip production after the pandemic had created a worldwide chip shortage that some American car factories forced to close, which resulted in the chips act.
But the Trump government has already taken steps to arouse the program.
At the end of February, Michael Grimes, a senior official at the Ministry of Trade and former investment banker at Morgan Stanley, held short interviews with employees of the Chips program office, which supervises the subsidies.
In interactions, some described as 'humiliating', Mr Grimes asked employees to justify their intellect by providing test results from the SAT or IQ test, said four people who are familiar with the evaluations. Some were asked to do mathematical problems, such as the value of four calculating for the fourth power or long division.
Last week the Commerce Department 40 of the Chips Office employees fired, almost a third of the entire team, these people said.
The administration has also started discussing changes in projects that have received chip-related subsidies, according to three people who are familiar with the internal conversations. The Biden administration gave a preferred treatment for recipients who hired trade union workers and provided childcare to employees, guidelines that can be changed, people said.
The reviews and dismissals were previously reported by Reuters and CNBC.
On Wednesday, the day after Mr Trump's speech, the Semiconductor Industry Association organized a phone call with member companies, said three people who are familiar with the discussion. During the call, people have the frustration of Mr. Trump with the law on personal animus with Mr. Biden performed.
Some said that Mr Trump's criticism could cause challenges by drawing the public's attention on their projects, according to people. But many also expressed the confidence that their legal agreements with the Commerce department could not be changed.
The Semiconductor Industry Association refused to comment.
So far, the Commerce Department has signed contracts to grant more than $ 36 billion in federal subsidies under the Chips Act. Samsung, Intel, Micron, Taiwan Semiconductor Manufacturing Company, known as TSMC, and others have promised to invest hundreds of billions of dollars in American chip facilities.
Mr. Trump has proposed to replace those stimuli with rates that increase the costs of making chips abroad. On Tuesday he said that the threat of TSMC rates, the world's largest maker of advanced semiconductors, had forced to increase his American investment by $ 100 billion and to double the number of plants it has built in Arizona to six.
“We don't have to give them money,” said Mr. Trump. “We just want to protect our companies and our people, and they will come because they don't have to pay rates when they build in America.”
It is unclear how many of a factor rates played in the plans of TSMC. The company had already acquired Land and had drawn up plans to expand its footprint in Arizona as soon as it had the customers to support three extra factories, said three people who were familiar with the Chips Act. TSMC invests earlier than before planned, partly because customers such as Apple and Nvidia are committed to buying more chips made by the US, the people added.
TSMC and Intel refused to comment. Micron and Samsung did not respond to requests for comments.
Lawyers and industrial managers have said that rates on chips themselves are not very effective because the United States immediately imports few chips. Chips are usually sent directly to electronic factories, generally in Asia, where they are placed in laptops, mobile phones and devices before being imported into the United States.
Some in the chips industry formulate plans to try to convince Mr Trump of the value of the law since the elections, including during the annual meeting of the industry in San Jose, California, in November. The first legislation was partly encouraged by a request from civil servants during the first Trump administration that TSMC invests in the United States, who start an attempt from the congress to guarantee the financing for the company.
That quickly snowed in a broader effort to finance the industry, because other companies and legislators wanted to participate.
“We must ensure that our colleagues in Washington remember that embracing and continuing to invest in our incredible industry,” said Deirdre Hanford, the Chief Executive of Natcast, a non -profit organization created by Chips to supervise the development of Technology semiconductor.
The risk of losing financing has led to some industrial managers complaining that the government was too slow to provide subsidies in the first place. While the law went into place in August 2022, the BIDEN administration spent for months every project with the careful passage of each project. Most of the largest subsidies were completed after the elections.
“Is it perfect? No, “said Senator Mark Warner, a Democrat in Virginia, during a Washington Tech and Policy Conference last week. “But without that there would be no other manufacturing facility built in America.”
