The Biden administration is rushing to provide semiconductor support in the CHIPS Act - before Trump took office.

November 8, 2024 15:56 JST
Companies such as Intel and Samsung Electronics are exploring early contract signings as much as possible.
The Republican Party is considering the "rationalization" of the CHIPS Act - House Speaker Johnson.
The Biden administration is in a hurry to conclude contracts based on the 2022 CHIPS and Science Act to support semiconductor manufacturing by companies such as Intel and Samsung Electronics within the U.S., strengthening one of the key initiatives of the Biden administration before President Trump takes office.

The Commerce Department has allocated over 90% of the $39 billion (approximately 59.6 trillion yen) in subsidies under the same law. However, there has only been one binding agreement announced by the department to date.
For more than 20 companies still in the process, the next two months will be extremely important. According to knowledgeable sources, companies such as Taiwan Semiconductor Manufacturing Company (TSMC) and U.S. Global Foundries, among others, have completed negotiations and are soon to announce the final contract details.
According to another informant who revealed anonymously due to undisclosed information, companies such as Intel, Samsung, and Micron Technology are still finalizing the substantial details of the contract.

Authorities have been aiming for a long time to finalize as many trades as possible by the end of 2024 and start flowing funds to companies that have achieved specific milestones. Biden's team aims to separate industrial policy initiatives from partisan politics, increasing the urgency of the situation following Trump's victory. Semiconductor manufacturers also intend to avoid reviewing conditions with the new administration.
In addition to subsidies, the CHIPS Act, including loans of billions of dollars and a 25% tax deduction, has secured a commitment from companies to invest around $400 billion in factories in the United States. The Democratic administration considers this bipartisan program as one of its major achievements, while Trump and his close aides have recently criticized this law.

Last month, Trump criticized the Democratic initiative as 'very bad' and suggested that tariffs would be a better solution. Republican House Speaker Johnson retracted previous statements suggesting that the party would 'probably' seek the repeal of the law and stated that they are seeking to 'rationalize' the law.

Since the presidential election, Trump's camp has not clearly defined its position on this issue, but among industry lobbyists, it is generally believed that the CHIPS Act will be maintained nearly as it is.

Both the Democratic and Republican parties assert that domestic semiconductor manufacturing is a priority for national security. Semiconductors are the lifeline of the modern economy and an essential component of all types of consumer and military technologies, also a focal point in the tension between the US and China.
Furthermore, compared to Biden's other industrial policy initiatives, the CHIPS Act has garnered broad support.
Sudha David-Wilp, a senior fellow at the Center for Strategic and International Studies in Washington, stated, 'It is clear that there is no fundamental geopolitical change with China from this presidential election.'