Trump Creates New Office To Run CHIPS Act Program As Lutnick Reportedly Weighs Changes
President Donald Trump has pulled execution of the CHIPS Act under a new entity overseen by Secretary of Commerce Howard Lutnick, who reportedly intends to take a tougher position on the program meant to spur domestic semiconductor manufacturing.
Per an executive order signed by Trump Monday, the newly created United States Investment Accelerator aims to pull back regulations and hasten the permitting process for projects planning over $1B in U.S. investment.
The new program will also be responsible for the negotiation of "much better CHIPS Act deals than the previous Administration," according to The White House's website.
Lutnick is planning to tinker with the legislation to push for larger investments by companies, according to Bloomberg.
The commerce secretary might hold on to recipient awards until they expand their investment or get rid of previously established payouts altogether, Bloomberg reports, based on conversations with anonymous sources.
He is also exploring increasing the program's 25% tax credit, which has more value than direct funding for many companies. Major changes to the CHIPS Act’s tax breaks would require getting Congress on board.
The tax credit subsidies allow companies to claim credit for projects that start by the end of 2026.
President Joe Biden introduced the CHIPS Act in 2022 with the goal of doling out $52.7B in grants to incentivize stateside semiconductor manufacturing. Funding awards serve as a direct reimbursement to companies for their private expenses on the projects. The payouts are given over time as project milestones are completed.
As it stands, 90% of the funding has been accounted for. The program gave $39B in loans in its first round, spurring $220B in investment. About $4.3B was given out in a deal frenzy after Trump's election as Democrats aimed to lock down projects before Trump could change the program.
Trump has criticized the legislation, arguing the money should be used toward debt instead.
Some manufacturers have downsized or shifted their plans since winning grants. Micron won $6.1B in CHIPS funding to build four facilities in New York and one in Idaho. However, one New York facility might be put on ice as the company is negotiating building a similar facility in Japan.
Intel won an $8.5B grant to build and renovate semiconductor factories in Oregon, Arizona, New Mexico and Ohio last year. However, the Biden administration lowered the award by $500M due to concerns about whether the company could deliver on its Ohio investment. Intel has pushed the two Ohio facilities' completion date to the end of the decade instead of this year.
Samsung also had to reduce its CHIPS Act funding after shrinking its plans to build in Texas.
On the other hand, one of the winners, Taiwan Semiconductor Manufacturing Co., is planning to invest another $100B in U.S. plants on top of an initial $65B. Its CHIPS Act award stands at $11.6B.
