US Secretary of Commerce Howard Lutnick on Wednesday said that the US government has been reworking agreements forged with semiconductor makers under the 2022 CHIPS and Science Act to secure what he called better terms aimed at generating additional domestic investment.
“Are we renegotiating? Absolutely, for the benefit of the American taxpayer, for sure,” Lutnick said at a meeting of the US Senate Appropriations Committee. “We’re getting more value for the same dollars.”
Lutnick cited the decision in March by Taiwan Semiconductor Manufacturing Co (台積電), a recipient of US$6.6 billion in grants, to boost its US investment commitment. The company is adding US$100 billion to a previous US$65 billion pledge, but without any additional funding from the US government, he said.
Photo: EPA-EFE
US President Donald Trump has urged the US Congress to repeal the 2022 CHIPS and Science Act that was a centerpiece of former US president Joe Biden’s domestic agenda, although Republican and Democratic lawmakers have little desire to revoke a bipartisan law promising US$52 billion in subsidies. Lutnick has previously signaled that the commerce department might withhold grants to press companies to follow in TSMC’s footsteps and expand their planned domestic semiconductor projects.
During his nearly two-hour appearance before the committee, Lutnick addressed a range of issues essential to the semiconductor industry, including the administration’s push to bring to the US more chips-related investment.
He defended artificial intelligence (AI) deals with the United Arab Emirates unveiled last month during Trump’s trip to the Middle East, saying the accords were crafted to spur complementary levels of spending in the US.
The Trump administration is moving toward negotiating individual deals with nations while maintaining security guarantees designed to prevent Chinese companies from obtaining AI chips.
“Our view is we are going to allow our allies to buy AI chips, provided they’re run by an approved American data center operator, and the cloud that touches that data center is an approved American operator,” Lutnick said.
The US has moved to pressure allies against adopting Huawei Technologies Co’s (華為) new Ascend chip, warning that any use risked breaching export controls imposed by Washington.
The commerce department last month said that it was to warn people about “the potential consequences of allowing US AI chips to be used for training and inference of Chinese AI models.”
Lutnick said that China still lacks the capability to produce high volumes of sophisticated semiconductors.
He estimated that China could probably produce about 200,000 advanced chips, like the kind used to train AI services or run smartphones, a tiny number compared with demand.
“They say they are making them and they are not,” he said.
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