Donald Trump and his backers were hardly fans of the Biden administration's CHIPS and Science Act during the election campaign, yet the next U.S. government does not plan to reverse it. At least, that's the impression the next U.S. Commerce Secretary, Howard Lutnick, gave to outgoing Secretary Gina Raimondo, Bloomberg reports.
Before the election, Trump criticized the CHIPS Act, labeling it highly flawed and proposing tariffs as an alternative. But Lutnick, his chosen appointee for the position who will inherit program management from Raimondo, has indicated that he plans to continue with its implementation.
In a recent meeting with Raimondo, Lutnick expressed his commitment to the CHIPS and Science initiative, according to remarks Raimondo shared during a staff gathering last week, published by Bloomberg. Neither the Commerce Department nor Trump's transition team, responded when asked for clarification.
The $52 billion CHIPS and Science Act, launched under President Joe Biden to revitalize U.S. semiconductor manufacturing, is now transitioning to Donald Trump's administration. With $39 billion in grants already allocated and over $450 billion in private investments spurred, the program does not seem like a failure. Indeed, its progress is evident: Intel, GlobalFoundries, TSMC, Texas Instruments, and Samsung Foundry are building massive fabs in the U.S. While both Intel and Samsung faced some setbacks, both are committed to invest in America.
But while the new Commerce Secretary reportedly plans to continue the CHIPS and Science program, other people in Trump's team are not very fond of the initiative.
Vivek Ramaswamy, who is going to co-lead Donald Trump's Department of Government Efficiency (DOGE) presidential advisory commission with Elon Musk next year, criticized the Biden administration's approach to distributing multi-billion grants to semiconductor manufacturers weeks before Biden's tenancy is over, reports Politico. He called the action 'inappropriate' ahead of the power transition and threatened DOGE review of the funding contracts as well as other initiatives of the current administration.
"Wasteful subsidies under the IRA and CHIPS Act are being rapidly pushed out before January 20," Ramaswamy wrote in an X post a couple of months ago. "DOGE will review every one of these 11th-hour gambits and recommend that Inspectors General scrutinize these last-minute contracts. Political appointees who go on to work for beneficiaries of this midnight spending spree should be exposed unsparingly."
In the weeks following the election, over $16 billion in funding contracts were awarded to five semiconductor companies, including BAE Systems, GlobalFoundries, Intel, Rocket Lab, and TSMC as chipmakers raced to ink their deals with the U.S. government and get their funding under the CHIPS Act. Before the election, the administration had awarded just one major contract, totaling $123 million, to Polar Semiconductor in Minnesota.
Commerce Secretary Gina Raimondo has defended the timeline, asserting it was part of the original plan under the CHIPS and Science Act. Moreover, she has denied that the timeline has been influenced by any potential policy reversals under the next administration.
