US President Donald Trump’s pick to lead the agency in charge of a US$52 billion semiconductor subsidy program declined to give it unqualified support, raising questions about the disbursement of funds to companies like Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電).
“I can’t say that I can honor something I haven’t read,” Howard Lutnick, Trump’s nominee for commerce secretary, said of the binding CHIPS and Science Act awards in a confirmation hearing on Wednesday. “To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get the benefit of the bargain.”
Still, Lutnick signaled a commitment to the program overall. He told senators that the CHIPS Act is an “excellent down payment” and repeatedly emphasized the importance of revitalizing US semiconductor manufacturing.
Photo: EPA-EFE
All told, his remarks indicate that the Trump administration will seek to put its own stamp on the initiative, but not unravel it entirely.
That could include attempts to remove environmental requirements or labor-friendly provisions, as some Republican lawmakers have already signaled an interest in doing.
The CHIPS Act set aside US$39 billion in grants for manufacturing projects — plus loans and tax breaks — to boost US chipmaking after decades of production shifting to Asia.
The program is one of the largest pieces of US industrial policy in more than a generation and was a major achievement of former US president Joe Biden’s administration.
Companies pledged to invest more than US$400 billion in response, including major new projects from Micron, Samsung Electronics Co and GlobalFoundries Inc. Those chipmakers are among the 20 companies that signed final contracts with the Biden administration — documents that industry and government officials generally viewed to be ironclad.
However, throughout negotiations, some companies worried that the language of their contracts gives Trump officials some room to make changes, Bloomberg has reported.
So far, just US$4.3 billion in manufacturing incentives has actually gone out the door. That is because companies will only receive money when they hit key construction and production benchmarks.
“As a structure, I think we need to get it right,” Lutnick said on Wednesday when asked about the awards. “I think we need to review them and get it right. But as the way the Congress has set it, it’s an excellent down payment in our ability to bring semiconductor manufacturing back to America.”
Lutnick also dismissed concerns about Trump’s proposed federal funding freeze causing delays for the CHIPS Act initiative. The program “has not really distributed much money, so the timing is not really impacted,” he said, adding that he is committed to “deliver efficiently and effectively the outcomes that you anticipated — or better.”
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