The Chips Act under the microscope, Why is Trump seeking to repeal it?

This article from Sky News Arabia examines why United States President Donald Trump is putting the CHIPS and Science Act under intense political pressure. The law, signed by former president Joe Biden in 2022, was designed to revive domestic semiconductor manufacturing and reduce reliance on Asian supply chains. Trump now criticizes the program as wasteful and seeks either to cancel or fundamentally reorient it, even as it attracts hundreds of billions of dollars in private investment.

What the CHIPS and Science Act Actually Does

The article explains that the CHIPS and Science Act allocates around 280 billion dollars over ten years to support research, development, and manufacturing of semiconductors in the United States. Roughly 200 billion dollars target scientific research and development, about 52 billion dollars support chip fabrication and related research, 24 billion dollars come as tax credits on chip production, and 3 billion dollars fund wireless supply chain and technology programs.

The law received bipartisan support because it aims to cut dependence on Asian manufacturing hubs for components that power everything from smartphones to missiles. By offering grants and tax incentives, it encourages companies to build advanced fabrication plants on American soil and to rebuild a domestic ecosystem that had eroded over decades.

Early Impact on the US Chip Industry

Drawing on a Bloomberg analysis, the article notes that the CHIPS and Science Act has already triggered about 450 billion dollars in private commitments for new plants in the United States. Only a small fraction of the public funds has actually been disbursed so far, partly because the program is designed to release money in stages as companies meet construction and production milestones.

Major beneficiaries include Intel, which secured multibillion dollar grants for both commercial and military chip projects, as well as TSMC, Samsung, Micron Technology, Texas Instruments, GlobalFoundries, and several packaging and assembly firms. Even companies that do not receive direct grants can still benefit from significant tax credits on chip production. According to the Semiconductor Industry Association, the United States is on track to nearly triple its manufacturing capacity by 2032, potentially raising its global market share from 10 percent to about 14 percent instead of falling to 8 percent.

Trump’s Critique And His Alternative Strategy

Despite these gains, Trump labels the CHIPS and Science Act a terrible misuse of taxpayer money. He argues that tariffs achieve more than subsidies, pointing to TSMC’s decision to invest an additional 100 billion dollars in United States facilities without receiving new grants as proof that trade pressure and market incentives can work.

Trump’s administration is reviewing deals approved under the Biden era with the help of a new office at the Department of Commerce called the American Investment Accelerator. Commerce Secretary Howard Lutnick has signaled that the government will revisit the terms of existing CHIPS agreements while Trump hints at further tariffs on imported semiconductors to push more fabrication onto United States soil.

However, even with this review, Bloomberg reports that the Trump administration remains legally bound to spend tens of billions already appropriated by Congress for the first phase of the program through the 2026 fiscal year. The question is less whether the money will be spent and more on what terms and under whose political banner.

Hilda Maalouf Melki Trump Wants to Put His Own Stamp on the Law

Oxford certified AI expert Hilda Maalouf Melki explains that Trump’s apparent shift from total rejection of the CHIPS and Science Act to creating a new office to manage its funds is not a contradiction but a strategic repositioning. In her view, Trump does not want to abandon the law but to reshape it in line with his deal focused philosophy.

She argues that Trump seeks to transform a Biden era initiative into a Trump branded industrial program. By renegotiating grants, imposing stricter conditions, and publicly emphasizing tariff leverage, he aims to demonstrate tougher fiscal oversight and stronger bargaining with corporations. In this way, the CHIPS and Science Act becomes both an economic tool and a political trophy.

Semiconductors as a Strategic Weapon in US China Rivalry

Hilda Maalouf Melki stresses that semiconductor manufacturing is far more than a conventional industrial sector. Chips are the backbone of modern economies and militaries, embedded in consumer electronics, electric vehicles, aircraft, and precision weapons. In the strategic contest between the United States and China, control over advanced chip production functions as a first line of technological defense.

For this reason, Trump understands that completely dismantling the CHIPS and Science program would effectively give up a key strategic lever just as China accelerates its own investments in chip fabrication and attempts to reduce reliance on Western technology. Instead, he wants to remold the program so that it reflects his priorities and reinforces his narrative of tough economic nationalism.

Political Uncertainty and the Investment Climate

Hilda Maalouf Melki also warns that repeatedly rewriting the rules of a long term industrial policy after each presidential cycle risks undermining investor confidence. Global chip companies have already committed projects worth many billions based on expectations shaped by Biden era incentives. If the terms change abruptly, they may reconsider whether the United States is a stable place for such capital intensive investments and could look to more predictable environments such as Europe or South Korea.

The core dilemma for Trump, she suggests, is how to impose new conditions and extract better deals from companies without driving them away. A more Trump flavored CHIPS program might succeed in delivering stronger oversight and bargaining wins, but if it creates too much uncertainty, it could slow the very reshoring of semiconductor capacity that both parties claim to support.

In this sense, the debate over the CHIPS and Science Act is not only about one law but about the broader credibility of United States industrial policy in an era where semiconductor leadership and technological sovereignty are central to economic power and national security.