Chipmakers Sound Alarm as Trump Targets CHIPS Act, Threatening TSMC's US Expansion

Summary

Background:

• The CHIPS Act, a bipartisan legislation aimed at boosting U.S. semiconductor manufacturing and reducing reliance on foreign suppliers, is facing threats from President Trump.
• Apple announced plans in 2022 to produce 'Made in America' chips as part of the CHIPS Act initiative, with TSMC building plants in Arizona.

Recent Developments:

• Trump's Criticism:

  • President Trump has criticized the CHIPS Act, describing it as a 'horrible, horrible thing' and calling for its reversal.
  • The administration is reportedly working to dismantle the act and has already made layoffs in the team managing CHIPS Act grants.

• Industry Response:

  • Chipmakers, including members of the Semiconductor Industry Association (SIA), held a conference call to discuss Trump's remarks and their potential impact.
  • Executives are seeking legal advice on the administration's ability to terminate signed contracts and claw back funding.

• TSMC's Position:

  • TSMC, a key player in the CHIPS Act initiative, has made significant investments in U.S. production capacity but remains uncertain about future plans due to Trump's attacks.
  • The $100M investment recently announced by TSMC is now at risk.

Implications:

• If CHIPS Act funding is compromised, it could impact TSMC's plans for new plants and the broader semiconductor industry in the U.S., including Apple's 'Made in America' chip initiative.