The American “Chip Act” adopted during the presidency of Joe Biden, which is aimed at supporting and developing the semiconductor industry in the United States, may soon cease to be in effect. The new head of state, Donald Trump, has always been strongly opposed to this initiative, and soon all officials responsible for the application of this law are expected to be dismissed.
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The National Institute of Standards and Technology (NIST) has been designated as the government agency that administers the Chip Act; 500 officials have been recruited to implement the initiative, who are now listed as employees on probation and will eventually be fired—a mechanism the country’s new government is currently using to reduce the number of civil servants. If there are no more employees to administer the government program under the law, it will effectively cease to function: there will be no one to check that companies are complying with its requirements, and no one will be able to transfer funds.
The employees responsible for the program expect to lose their jobs this week, SemiWiki.com reports, citing sources at NIST. The employees of the computer security and anti-hacker units are also under attack. The institute is preparing to cut 497 people, including 74 PhDs, 57% of the employees of the Chip Act program, which stimulates the industry, and 67% of the employees engaged in research and development. The name of the new candidate for the post of NIST head has not yet been announced by the White House.
Instead of the “CHIP Act,” Trump says he intends to impose 25% tariffs on popular semiconductor products, a strategy that shifts from stimulating U.S. semiconductor production to sanctions for imports. This seems dubious because 100% of AI chips, 100% of AMD chips and all other TSMC customers, and an increasing amount of Intel products are imported from Taiwan alone. More than 80% of the chips used in the country are manufactured outside the U.S. There is an opinion that Trump will not actually impose such tariffs, and his initiative is a position for negotiations. In such circumstances, TSMC will hardly be able to take over Intel’s manufacturing unit, because handing over the only American manufacturer of advanced semiconductors directly contradicts the new logic of the authorities.
The repeal of the CHIP Act threatens to become a headwind for the semiconductor industry in 2025. Manufacturers will be forced to cut spending on programs they hoped to fund under the act, and those programs may even be shut down.