The Biden administration’s multi-billion-dollar effort to strengthen domestic semiconductor manufacturing is now under review by President Donald Trump’s team, with some agreements already being revised and others potentially scrapped.
Commerce Secretary Howard Lutnick revealed during a Senate Appropriations Committee hearing on Wednesday that certain grants distributed through the CHIPS and Science Act are being renegotiated to ensure better returns for the American public.
According to Lutnick, some of the original deals appeared to be “just overly generous.” He stated, “All the deals are getting better, and the only deals that are not getting done are deals that should have never been done in the first place.”
His comments suggest that not every agreement will survive the review process.
The CHIPS Act, signed into law by President Joe Biden in 2022, earmarked $52.7 billion to bolster U.S. semiconductor research and production while enticing major chipmakers to shift operations from Asia to American soil.
Among the beneficiaries were global giants such as Taiwan’s TSMC, South Korea’s Samsung and SK Hynix, and U.S. firms like Intel and Micron.
Although the grant agreements were approved before Biden left office, much of the funding had yet to be distributed, pending company milestones on factory expansion.
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Boosting Returns Without Raising Costs
Lutnick highlighted the renegotiation with TSMC as a major success. The Taiwanese manufacturer originally pledged to invest $65 billion but later increased that figure to $100 billion.
Remarkably, the company’s $6 billion grant from the U.S. remained unchanged. “We were able to modify the award for the same $6 billion of (government) funding,” Lutnick noted.
TSMC made its new investment pledge in March, but it remains unclear if that directly correlates with the renegotiation. The company declined to comment.
In February, Reuters had reported that the White House was already exploring revisions to some semiconductor awards and anticipated delays in disbursements.
Addressing additional concerns, Lutnick affirmed the administration’s alignment with the objective of securing more than half of global AI computing capacity within the U.S.
He responded to criticism surrounding a Trump-era agreement allowing the UAE access to American AI chips, which some fear could compromise U.S. technological dominance.
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