White House reviewing CHIPS Act awards, upcoming payments possibly delayed

Several sources familiar with the matter reported that the Trump White House wants to renegotiate some of the terms in several CHIPS and Science Act awards, which could delay upcoming disbursements. According to Reuters, Washington wants to assess and change some of the requirements that the previous administration applied to the grant.

“The CHIPS Program Office has told us that certain conditions that do not align with President Trump’s executive orders and policies are now under review for all CHIPS Direct Funding Agreements,” GlobalWafers spokesperson Leah Peng told Reuters. CHIPS Act awards distributed under the Biden administration often came with clauses, like requiring awardees to only use unionized labor for building out their infrastructure and to provide childcare to their workers. While it’s not clear yet what the White House wants to do, it may seem that it’s intent on making these requirements more lenient or maybe even remove them altogether, especially if they do not go in line with the direction Washington is taking.

Because of this development, the Semiconductor Industry Association (SIA) is said to be surveying its members on how they think that the CHIPS and Science Act could improve. Nevertheless, SIA Vice President of Government Affairs David Isaacs told Reuters, “It’s important both the manufacturing incentives and research programs proceed without disruption, and we stand ready to work with Commerce Secretary Nominee Lutnick and other members of the Trump administration to streamline the program’s requirements and achieve our shared goal of strengthening U.S. leadership in chip technology.”

However, aside from these potential loosening of prerequisites, sources also say that the current administration has raised concerns about CHIPS Act awardees using their subsidies to expand overseas. For example, Intel signed a $7.86 billion funding contract under the program, with the company already receiving $2.2 billion, but it still announced a $300 million investment in China to expand its packaging and testing facility there. This is in direct contravention of the CHIPS and Science Act’s purpose, which was to lure manufacturers into producing the most advanced semiconductors on American soil.

There is no clear indication yet of what changes the White House wants to implement nor how they would affect the existing contracts. This likely has several members of the semiconductor industry, especially awardees who are yet to receive their payouts, getting a bit nervous. After all, Trump has previously voiced opposition to the subsidies, instead preferring tariffs to force companies to get back into the U.S. Despite that, we’re seeing some promising signs like the Republican-held Congress introducing an act that extends tax credits to chip designers and Vice President JD Vance declaring in an international forum that the most powerful AI chips will be built in America.