President-elect Donald Trump is unlikely to roll back the Biden administration’s CHIPS and Science Act, despite his campaign rhetoric on the bill, experts say.
The legislation, which provides incentives for chipmakers to set up manufacturing in the U.S., became a point of contention in the final month of the election cycle.
Trump criticized the bill and its price tag. House Speaker Mike Johnson, a Republican, then said that his party “probably will” try to repeal the law. Johnson later walked the statement back.
Still, the key Biden policy, which has massive implications for Asian chips makers like TSMC and Samsung, is likely safe in the near term, according to chip experts.
Despite signaling he’s “not thrilled” about the bill, Trump is probably not going to roll it back, Paul Triolo, senior vice president for China and technology policy lead at Albright Stonebridge, told CNBC’s “Squawk Box Asia” on Thursday.
“There’s support for this kind of onshoring of advanced manufacturing,” he added.
The Biden administration signed the bipartisan CHIPS and Science Act in August 2022, committing almost $53 billion to invest in domestic semiconductor manufacturing and research with the aim of boosting U.S. competitiveness with China.
The former president made headlines in October by attacking the legislation as a “bad” deal during a three hour interview with popular podcaster Joe Rogan.
“We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here, and they’re not going to give us the good companies anyway,” he said, arguing instead that his proposal to increase tariffs would attract chip companies for free.
The allocation of the CHIPS Act has been slow, with the lion’s share of the earmarked funds yet to be doled out.
So far, the bill has attracted Asian chip makers such as Taiwan Semiconductor Manufacturing Company and Samsung to build U.S. facilities. The two companies have already been offered $6.6 billion and $6.4 billion, respectively.
The largest CHIPS Act beneficiary has been the American chip maker Intel, which has been awarded $8.5 billion in funding.
While Trump may want to modify and change some of the priorities of the bill and its fund allocation, he’s expected to leave most of it intact.
The Trump administration will probably try to reinterpret the bill “so they can spread the money a little differently than Biden, but I don’t think they’re going to roll it back,” Adam Posen, president of the Peterson Institute for International Economics, told CNBC’s “Squawk Box Asia” on Thursday.
Posen said that this would mirror what Biden had done by leaving Trump’s China tariffs in place when he took office, despite pivoting to a more industrial policy focused strategy.
“But I do think there’ll be much more expansion on the tariff front, rather than industrial policy expanding,” he added.