Senate Republicans are rejecting President Trump’s call to repeal the CHIPS and Science Act, which passed in 2022 to boost domestic semiconductor manufacturing. However, they are willing to consider adjustments to the law. The CHIPS Act, a bipartisan effort, allocated $54 billion in grants and $24 billion in tax credits to encourage U.S.-based chip production. It has spurred significant private investments, including over $100 billion from Taiwan Semiconductor Manufacturing Co. (TSMC) and major commitments from Intel, Micron, and Samsung.
President Trump criticized the law during a recent address to Congress, calling it “horrible” and arguing that companies did not need incentives to build in the U.S. Instead, he proposed imposing 100% tariffs on semiconductor imports, claiming this would drive domestic production without government spending. Trump suggested reallocating leftover CHIPS Act funds to reduce the deficit or support other priorities. He highlighted TSMC’s ongoing investments in Arizona as evidence that these projects would happen without federal aid.
Despite Trump’s assertions, TSMC and its leadership clarified that customer demand, not tariff threats, drove their decision to expand U.S. operations. Senator John Cornyn of Texas, a key supporter of the CHIPS Act, emphasized the law’s role in enabling TSMC to establish its initial Arizona plants. Cornyn credited both Trump and Commerce Secretary Howard Lutnik for negotiating TSMC’s $100 billion expansion but pointed out that the CHIPS Act’s tax incentives were crucial to laying the groundwork.
Cornyn and other Republican senators remain committed to the CHIPS Act, citing its success in creating jobs and reducing U.S. reliance on foreign-made advanced semiconductors. However, Cornyn expressed a preference for encouraging more private investment over government grants. Senator Thom Tillis of North Carolina also supported the law but acknowledged that adjustments might be necessary. Tillis cautioned against rolling back tax credits abruptly, warning that such moves could disrupt long-term business plans and drive companies to relocate elsewhere.
Meanwhile, Senator Todd Young of Indiana, the lead Republican on the legislation, dismissed the idea of repealing the CHIPS Act, emphasizing its positive outcomes. Young noted the more than half a trillion dollars in private investment generated by the law and advocated for optimizing its implementation rather than undoing it. Similarly, Senator Lindsey Graham of South Carolina and Senator Jerry Moran of Kansas stood by their votes, signaling openness to refining the program.
Not all Republicans share this view. Senator Bill Hagerty of Tennessee, while supporting a permitting fix tied to the CHIPS Act, welcomed the idea of repealing the law. Hagerty expressed longstanding concerns about the legislation and suggested that its removal would not be a loss.
As the CHIPS Act continues to shape U.S. semiconductor production, Republicans face a balancing act between supporting domestic manufacturing and aligning with Trump’s vision of reducing government intervention. The debate highlights differing priorities within the party as it navigates economic and industrial policies.
What do you think about the CHIPS Act and the ongoing discussions? Share your thoughts in the comments below!
