If Trump is elected as the US President, will he repeal the "CHIP Act"?
Latest update time：2024-11-07
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According to a report by the National Broadcasting Corporation (NBC) on November 6, the Republican presidential candidate and former President Trump claimed to have won the 2024 US presidential election in the early morning of November 6. In this context, Trump's previous statements on the US "Chips and Science Act" and the remarks of relevant people in his party have aroused great attention from all walks of life to the future direction of the bill.
Earlier, Trump made shocking remarks during an interview with the popular American podcast "The Joe Rogan Experience", saying that Taiwan "stole" the American chip business and even asked it to pay "protection fees" to the United States. Mike Johnson, the speaker of the House of Representatives from the same party as Trump, made even more shocking remarks, not only mentioning that he would consider repealing the US "Chips and Science Act", but also further confirmed this possibility during the development of related events.
A student reporter named Luke Radel broke the news on the "X" platform, asking House Speaker Mike Johnson: "If Trump wins the election, will he and Trump repeal the Chips and Science Act?" Johnson's answer was: "I think we might!" Coincidentally, CNN also reported that at a campaign event in Syracuse, New York, Johnson told reporters that if Republicans controlled Congress and Trump returned to the White House, they "might" try to repeal the semiconductor chip manufacturing plan.
In fact, Trump himself had criticized the practice of using federal subsidies to vigorously support the US semiconductor manufacturing industry in previous programs, bluntly saying that the "chip bill" was "too bad" and expressed his hope to replace it with tariffs that would increase prices for the middle class.
The US Chips and Science Act is an important bill that was officially signed into law by former US President Biden at the White House on August 9, 2022. The bill aims to provide approximately US$52.7 billion in government subsidies for semiconductor production and research in the United States, and provide more than US$200 billion in funds to stimulate innovation and development in other US technology fields, thereby enhancing the competitiveness of the United States in the field of science and technology.
Its core goals cover several important aspects: First, it focuses on promoting the improvement of domestic chip manufacturing capabilities in the United States, and encourages companies to build advanced chip manufacturing plants in the United States to gradually reduce dependence on overseas chip manufacturing capacity, especially in Asia; Second, it vigorously promotes the innovation and development of semiconductor technology, and uses funds to support related research projects of universities, research institutions and enterprises, and strives to maintain a leading position in cutting-edge chip technology areas, such as advanced process technology, new chip architecture, etc.; Third, it focuses on strengthening the security and controllability of the supply chain. In view of the fluctuations and risks in the global chip supply during special periods such as the epidemic, the United States intends to use this bill to ensure that key chips and related raw materials, equipment and other supply chain links are firmly in its own hands.
Since the implementation of the Act, it has had many significant impacts on the semiconductor industry in the United States and even the world. On the one hand, many American semiconductor companies, attracted by the subsidy policy, have announced plans to expand their investment and factory construction in the United States. For example, industry giants such as Intel have increased their investment in the construction of advanced process chip factories, which has driven employment and development of related industries in the United States to a certain extent. On the other hand, the Act has also triggered subtle changes in the global chip industry landscape. Some overseas companies that originally relied on American technology and markets have begun to re-examine their own supply chain layout and actively seek more autonomy and diversified development paths to effectively deal with possible supply chain risks.
In August this year, on the second anniversary of the signing of the US Chips and Science Act, the US Department of Commerce announced that since the signing of the bill, which comes with $53 billion in subsidies, it has attracted more than $395 billion in direct investment and created more than 115,000 jobs. If the promised investments that have not yet been implemented are taken into account, the overall amount is even more impressive. For example, Intel has promised to increase its investment in semiconductor manufacturing in the United States to $100 billion, Micron has also promised to invest about $100 billion in New York State in the next 20 years, TSMC has also announced that it will increase its investment in the United States to $65 billion, and Samsung Electronics has announced that it will increase its investment in the United States to $40 billion. At the same time, data from the White House website shows that the Chips Act has also attracted about $640 billion in new chip-related investments. The United States expects to use these investments to account for nearly 30% of the world's leading chip production by 2030. Bloomberg data believes that by 2030, the United States' share of global wafer fab capacity is expected to rise from the current 10% to 14%, and without the stimulus of the Chips and Science Act, this proportion will drop to 8%.
Although the US Chip and Science Act has achieved certain results, not everyone agrees with it. Last year, Forbes pointed out that the United States does not have major capacity or capability issues in the semiconductor industry, and it dominates every field of the semiconductor industry-except for the pure contract foundry field (dominated by Taiwanese companies that work closely with American customers); in addition, China's threat to the United States' technological leadership is highly exaggerated. The United States (and its allies) dominate all key technologies in the ecosystem. Even in the much-feared "process node" technology race in the manufacturing field, the United States' position is functionally competitive, while China is far behind.
Now that Trump has really been elected as the President of the United States, there are many possibilities for his attitude towards the Chip Act. On the one hand, from his "America First" policy concept and his consistent position of protecting domestic industries, he may continue to support some of the core goals of the Chip Act. As the cornerstone industry of modern science and technology, the chip industry has a vital impact on the economic, military and technological competitiveness of the United States. The current US Chip Act promotes the improvement of local chip manufacturing capabilities and supply chain security, which is consistent with Trump's desire to protect the US domestic industry and ensure the United States' dominant position in key areas. He may think that by continuing to implement the Chip Act, he can further consolidate the leading position of the US semiconductor industry in the world and create more jobs for the United States. At the same time, he can also better safeguard the national security of the United States in an increasingly fierce international environment of technological competition.
For example, given the uneven distribution of global chip production capacity, continuing to promote the construction of chip manufacturing plants in the United States can effectively reduce the United States' dependence on chip manufacturing in Asia and reduce the risk of supply chain disruptions due to changes in the international situation. Moreover, through continued investment in semiconductor technology research and development, the United States is expected to make more breakthroughs in the cutting-edge field of chip technology and maintain its advantages in the high-tech field, which is also in line with Trump's expectations for the development of the US technology industry.
On the other hand, Trump may also question the Chip Act or even take measures to repeal it. First, Trump has always emphasized the need to reduce government intervention in the market, believing that too much government subsidies may distort the market mechanism, causing companies to rely too much on government funds and lose their market competitiveness. Although the huge financial subsidy plan in the Chip Act can attract companies to invest in building factories in the short term, in the long run, it may cause some companies to face unfair competition in the market and irrational resource allocation. Trump may believe that this government-led industrial support method is not in line with the free market economic principles he advocates, and thus resist the Chip Act.
Second, Trump tends to focus more on short-term effects and visible benefits in policy making. The implementation of the Chip Act is a long-term process, and the realization of its goals requires years or even longer of continuous investment and development. In the short term, it may not be possible to see obvious results brought about by the Chip Act, such as a significant increase in US chip exports and a thorough solution to supply chain security issues. Trump may lose patience with the Act because he cannot see immediate results, and then consider adjusting or abolishing it.
Regardless of the final outcome, the US chip bill and Trump’s possible decisions will continue to be the focus of attention of the global technology industry, and their subsequent development will have a profound impact on the direction of the global semiconductor industry and the international technological competition landscape.
References
https://mp.weixin.qq.com/s/VM-G6DzvpB8WIuKjMCUKEQ
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