Despite Donald Trump and his supporters expressing skepticism about the Biden administration’s CHIPS and Science Act during the campaign period, the forthcoming U.S. government seems poised to maintain the program. This was the implication made by Howard Lutnick, the incoming U.S. Commerce Secretary, during a conversation with the outgoing Secretary, Gina Raimondo, as per a Bloomberg report.
Throughout the campaign, Trump had been critical of the CHIPS Act, deeming it significantly flawed while suggesting tariffs as a preferable solution. However, Lutnick, Trump’s nominee for Commerce Secretary who will take over the program’s management from Raimondo, has signaled intentions to proceed with its rollout.
During a recent discussion with Raimondo, Lutnick affirmed his dedication to the CHIPS and Science initiative, Raimondo recounted at a staff meeting last week, a session reported by Bloomberg. Requests for further comments from the Commerce Department and Trump’s transition team went unanswered.
The CHIPS and Science Act, initiated under President Joe Biden with a budget of $52 billion to boost U.S. semiconductor production, is transitioning into Trump’s administration. With $39 billion in grants already distributed and more than $450 billion in private sector investments triggered, the initiative appears to be succeeding. Significant industry players like Intel, GlobalFoundries, TSMC, Texas Instruments, and Samsung Foundry are establishing large-scale manufacturing facilities in the U.S. Despite some challenges, both Intel and Samsung remain committed to their investment plans in the country.
Although the new Commerce Secretary reportedly intends to continue support for the CHIPS and Science program, there are others within Trump’s circle who are less enthusiastic about it.
Vivek Ramaswamy, set to co-chair Trump’s Department of Government Efficiency (DOGE) presidential advisory commission alongside Elon Musk next year, has criticized the Biden administration’s handling of multi-billion-dollar grants to semiconductor companies just weeks before the end of Biden’s term, according to Politico. He described the move as ‘inappropriate’ given the impending change in administration and hinted at a DOGE review of these funding agreements and other initiatives from the current government.
“Extravagant subsidies under the IRA and CHIPS Act are being hurriedly disbursed before January 20,” Ramaswamy stated in an X post a few months back. “DOGE will scrutinize each of these last-minute strategies and propose that Inspectors General closely examine these eleventh-hour contracts. Political appointees who subsequently join companies benefiting from this late-hour spending should be relentlessly exposed,” he added.
In the time since the election, over $16 billion in funding contracts were secured by five semiconductor firms, including BAE Systems, GlobalFoundries, Intel, Rocket Lab, and TSMC, as these companies rushed to finalize agreements with the U.S. government and secure their CHIPS Act funds. Before the election, only one major contract, totaling $123 million, had been awarded to Polar Semiconductor in Minnesota.
Commerce Secretary Gina Raimondo has stood by the timing, maintaining it was always part of the CHIPS and Science Act’s established schedule. She also refuted any suggestions that the timing was influenced by potential policy shifts anticipated with the new administration.
