Future of US Semiconductor Manufacturing Uncertain Amid Political Debates Over CHIPS Act

The CHIPS and Science Act, a bipartisan legislation passed in 2022, is facing significant uncertainty due to recent political debates. Former President Donald Trump has criticized the act, labeling it as “bad” and suggesting its potential repeal, which could severely impact the U.S. semiconductor industry. The CHIPS Act is designed to strengthen U.S. semiconductor research, development, and manufacturing, committing $280 billion to the industry, including $52 billion in subsidies for U.S. semiconductor manufacturers. This initiative aims to reduce the country’s reliance on foreign semiconductor producers, particularly from East Asia, where about 75% of all semiconductors are currently produced. California has been selected as the headquarters for the National Semiconductor Technology Center (NSTC), a key component of the CHIPS for America initiative. This facility, located in Sunnyvale, will drive over $1 billion in research funding and create more than 200 direct jobs over the next decade. It will focus on advanced semiconductor research and workforce development, leveraging California’s robust innovation ecosystem and world-class research institutions like UC Berkeley and Stanford. The potential repeal or mismanagement of the CHIPS Act has raised concerns among industry stakeholders. Speaker of the House Mike Johnson has expressed doubts about the act, suggesting that if Republicans gain full control in Washington, they might repeal it. However, local lawmakers and industry leaders argue that the act is crucial for bringing jobs and investments to regions like central New York, where Micron has committed a $100 billion investment due to the CHIPS Act incentives. The act’s success is also tied to its ability to address geopolitical risks and ensure that federal funds are not misused by corporations. Despite these challenges, the CHIPS Act has already shown positive impacts, such as the growth of Ironworkers Local 75 in Arizona from 250 to 1,100 members since its passage. Democratic leaders, including Vice President Kamala Harris, continue to support the CHIPS Act, highlighting its importance for U.S. economic and national security. Harris recently visited a Corning semiconductor plant in Michigan that received $325 million in CHIPS funding, underscoring the act’s role in creating jobs and enhancing domestic semiconductor production.