Illustration of Chinese and American flags on CPU.
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Experts say President-elect Donald Trump is unlikely to undo the Biden administration’s Chip and Science Act, despite his campaign rhetoric on the bill.
The legislation, which incentivizes chipmakers to build manufacturing plants in the United States, 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, later said his party “may” try to repeal the law. Johnson later retract statement.
However, chip experts said Biden’s key policies have a huge impact on Asian chipmakers such as TSMC and Samsung and may be safe in the short term.
Paul Triolo, senior vice president and head of technology policy for China at Albright Stonebridge, told CNBC’s “Squawk Box Asia” on Thursday that while he expressed concern about the bill “Not excited,” but Trump may not withdraw the bill.
“This outsourcing of advanced manufacturing is supported,” he added.
The Biden administration signed the bipartisan CHIPS and Science Act in August 2022, committing Nearly $53 billion Investing in domestic semiconductor manufacturing and research aims to increase U.S. competitiveness against China.
The former president made headlines in October when he attacked the legislation as a “bad” deal during a three-hour interview with popular podcast Joe Rogan.
“We put billions of dollars into letting rich companies come in and borrow money and build chip companies here, but they’re not going to provide us with good companies anyway,” he said. “It attracts chip companies for free.”
CHIPS Act distributions have been slow to come, with most of the earmarks yet to be released.
So far, the bill has attracted Asian chipmakers such as TSMC and Samsung to build factories in the United States. The two companies have received offers of US$6.6 billion and US$6.4 billion respectively.
The biggest beneficiary of the CHIPS Act is US chip manufacturer Intel, which received $8.5 billion in funding.
While Trump may want to revise and change some of the bill’s priorities and its funding allocation, he is expected to leave much of it unchanged.
Adam Posen, president of the Peterson Institute for International Economics, may try to reinterpret the bill “so that they can allocate the funds a little differently than Biden does, but I don’t think they will undo it.” , told CNBC’s “Squawk Box Asia” on Thursday.
Posen said that would mirror Biden’s approach when he took office, which was to keep Trump’s tariffs on China in place despite shifting to a more industrial policy-focused strategy.
“But I do think there will be more expansion on the tariff side than there is on industrial policy,” he added.
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