CHIPS Act Awards May Not Be Fully Funded as Promised

Recipients of the US government’s CHIPS and Science Act awards may not receive the full amount they were initially promised. According to Reuters, the Trump administration plans to review and modify the CHIPS Act’s current requirements, potentially renegotiating deals awarded by the Biden administration. Additionally, some disbursements already scheduled may be delayed, Reuters reports. A spokesperson for GlobalWafers, a Taiwan-based company and one of the program’s awardees, stated that the company was notified of the review due to certain conditions not aligning with Trump’s executive orders. GlobalWafers was set to receive $406 million in grants.

Background on the CHIPS Act

Former President Joe Biden signed the CHIPS Act into law in 2022 to boost semiconductor production in the US. The goal is for awardees to build new foundries and upgrade existing ones in the country, with each awardee having different milestones to achieve in order to receive grants. However, the Trump administration is reportedly concerned about requirements added by Biden’s team, including the use of unionized labor and provision of affordable childcare for factory workers. The White House is also unhappy about some companies, such as Intel, announcing expansion plans in China after being chosen as a recipient.

Potential Changes to CHIPS Act Policies

The US government has not formally announced any changes to CHIPS Act policies, so the extent of the changes and their impact on previous deals is still unclear. Bloomberg reported that the Biden administration rushed to finalize deals with recipients after Donald Trump won the presidential elections. Trump has vocally criticized the program, calling it “bad” and arguing that increasing tariffs would attract chip companies without the need for government grants.