520 billion dollars in subsidies will become history? Trump calls for the termination of the "Chip Act"

Returning to the White House for his second term, President Donald Trump called for an end to a landmark $52 billion chip subsidy program that has driven over $400 billion in total investments by global leading chip companies such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), Intel Corporation (INTC.US), and Samsung. According to reports, Trump, during a speech in Congress on Tuesday local time, described the "Chip Act" as a "disastrous thing" and received continuous applause from lawmakers in the room. He urged House Speaker Mike Johnson to immediately "repeal" the law and use the remaining funds for "debt reduction or any other effective use." The "Chip Act" is an important bipartisan law signed by former President Joe Biden in 2022. Under this framework, the U.S. government allocated $39 billion in direct cash subsidies, special loans, and up to 25% tax breaks to revitalize the U.S. chip manufacturing industry that had largely shifted to Asia, particularly Taiwan and South Korea, over the past few decades. The law also includes $11 billion for chip research and development programs. Although Trump called on House Speaker Johnson to immediately initiate the process to terminate the "Chip Act," most of the subsidy funds had already been allocated by the Biden administration officials before leaving office. This includes binding subsidy agreements with global major advanced chip manufacturers such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Intel Corporation, Samsung Electronics, and Micron Technology, Inc., as well as subsidy agreements with chip giants like Qualcomm and Texas Instruments Incorporated that produce older generation mature process chip products. For example, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR not only received $6.6 billion in direct funding subsidies, but during the Biden administration, U.S. government officials stated that this Taiwanese chip manufacturer would also receive up to $5 billion in phased special loans. To demonstrate the effectiveness of his hawkish tariff policy, Trump recently mentioned that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (the world's largest scale chip manufacturer) had recently committed to investing an additional $100 billion to build factories in the U.S., bringing a large number of high-end manufacturing jobs. "Bringing chip manufacturing back to the U.S." has been a major ambition that Biden has been vigorously promoting since taking office, with the core purpose of attracting chip manufacturing back to the U.S. after decades of chip manufacturing had shifted to South Korea and Taiwan. Biden himself sees this process of reshoring high-end manufacturing as one of his outstanding political achievements. According to statistics from the Semiconductor Industry Association (SIA), the U.S. share of global semiconductor manufacturing capacity had dropped from a peak of 37% in 1990 to just 12% in 2020, so Biden sees bringing chip manufacturing back to the U.S. as one of the most important tasks during his term. However, Trump had fiercely criticized the "Chip Act" before taking office in January, stating that imposing tariffs on foreign chip manufacturers would revitalize the U.S. chip manufacturing industry more than providing direct subsidies. This raised concerns in the industry that the U.S. government under Trump's leadership might try to change the "Chip Act." This put immense pressure on Biden and other White House officials at the time, and as a result, Biden administration officials reached binding subsidy agreements with most chip companies before leaving office. In 2022, the U.S. Congress passed the "Chip and Science Act," which aims to help chip companies build more chip factories in the U.S. The ultimate goal of the law is to once again make the U.S. a powerhouse in chip manufacturing and accelerate the realization of the U.S. government's desired "chip manufacturing reshoring to the U.S." With the recent announcement of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's first major chip factory in Arizona, which achieved a significant breakthrough in chip yield and uses a 4nm process technology, one of the highest-end processes for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, second only to 3nm. The company's largest customer, Apple Inc., announced that part of its chips will be produced in the Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR Arizona factory, showing that "bringing chip manufacturing back to the U.S." is no longer just an empty slogan. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has even discussed plans to produce its Blackwell architecture AI GPU in the Arizona chip factory with another major customer, NVIDIA Corporation (NVDA.US).AI Co., Ltd. Sponsored ADR may focus on 2nm and even more advanced processes at its other factories in the United States in the future."Bonjour, comment vas-tu aujourd'hui?" "Hello, how are you doing today?"