- US Commerce Secretary says CHIPS Act deals are being improved to protect public funds
- Trump wants to cut funding but retain reshoring goals as chipmakers commit billions
What happened: Trump targets CHIPS Act budget cuts
The Trump administration has begun renegotiating key CHIPS Act subsidy agreements with major semiconductor firms, including Intel, TSMC and Infinera. Commerce Secretary Howard Lutnick confirmed the shift in approach during a Senate Appropriations Committee hearing, citing a push for “more value for the same dollars.”
Lutnick stressed that current deals are being restructured to deliver better returns. “All the deals are getting better,” he told lawmakers, adding that only deals with weak foundations are being scrapped.
Instead of scrapping the CHIPS Act entirely — something Trump previously threatened — the administration is now reviewing funding levels. Proposed cuts include a 16.5% reduction to the Commerce Department’s budget, which would impact the National Institute of Standards and Technology (NIST).
Also read: Trump criticises CHIPS act in congress address
Also read: Nokia warns US tech edge at risk amid CHIPS and spectrum shifts
Why it is important
The CHIPS Act was designed under President Biden to bring semiconductor manufacturing back to the US. With global chip supply chains still fragile, this policy is central to national security and economic resilience.
Trump’s changes appear aimed at reshaping the Act without abandoning its original goals. Lutnick claimed the administration has secured over $300 billion in new private-sector commitments, doubling prior investments without additional taxpayer funding.
Geopolitical tensions and tariff threats are already pushing tech giants like Apple, TSMC and GlobalFoundries to invest in US facilities. Trump’s focus on fiscal efficiency could strengthen reshoring momentum — but it may also introduce new uncertainties for firms reliant on stable federal support.
