Trump’s call to repeal Biden-era CHIPS Act rebuffed by Senate Republicans

Senate Republicans who supported 2022 legislation designed to spur domestic semiconductor manufacturing are resisting President Trump’s call to repeal it but told The Washington Times they are open to adjustments.

The CHIPS and Science Act provided $54 billion in grants for companies to manufacture and design semiconductors in the U.S. and $24 billion for a 25% tax credit for new semiconductor manufacturing facilities.

Commonly called chips, semiconductors are used in various consumer products, such as computers, cellphones and cars. They also help power defense systems and tools used in national security.

Sen. John Cornyn, Texas Republican, said the law has addressed the vulnerability of U.S. reliance on advanced semiconductors manufactured primarily in Taiwan and South Korea.

“If the president and his administration have ideas about how it could be improved, or the administration of that law be improved, obviously they have a right to weigh in, and I’d be happy to work with them,” he said.

Repealing the law, as the president requested in his address to Congress, appears to be off the table.

“My belief is that we will continue to optimize the implementation of the CHIPS Act, which is something I’ve always thought we should do, but that the program will still continue to exist and keep producing good results,” Sen. Todd Young of Indiana, the lead Republican on the bipartisan legislation, said of the more than a half-trillion dollars in private investment the law has generated.

President Biden frequently touted the law as one of his significant achievements. It passed in 2022 with 17 Senate Republicans and 24 House Republicans voting with all Democrats in support. Only nine of those House Republicans are still serving, but 12 of the senators remain in Congress.

Mr. Young and other CHIPS Act supporters, such as Sen. Susan M. Collins, Maine Republican, said they were surprised Mr. Trump urged Congress to repeal the law, which he called “horrible.”

“We give hundreds of billions of dollars, and it doesn’t mean a thing,” the president said. “They take our money, and they don’t spend it.”

Mr. Trump said companies would build chips in America to avoid his threatened 100% tariffs on semiconductor imports without needing incentives from the CHIPS Act. He said any leftover money could reduce the deficit or fund other priorities.

The president referenced a commitment from the world’s largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Co., to invest another $100 billion to build more plants in Arizona. It has already invested more than $65 billion to build three facilities in the state. The first started producing 4-nanometer chips late last year.

“We’re giving them no money,” Mr. Trump said. “All that was important to them was they didn’t want to pay the tariffs, so they came and they’re building. And many other companies are coming. We don’t have to give them money.”

Two days after the president’s address, Taiwanese President Lai Ching-te and TSMC CEO C.C. Wei held a press conference to explain that the decision to invest more in U.S. semiconductor plants was based on customer demand, not Mr. Trump’s pressure.

Mr. Cornyn said the chips law helped TSMC build its initial plants in Arizona. He gave Mr. Trump and Commerce Secretary Howard Lutnik “a lot of credit” for negotiating the $100 billion expansion but said, “It’s things like the tax credit that was part of that bill that laid the foundation.”

In addition to TSMC’s facilities, the senator said, the chips law has spurred Intel to build semiconductor plants in Ohio, Micron in New York and Samsung in Texas.

“It’s been responsible for a whole lot of new jobs,” Mr. Cornyn said.

Still, he said, he would prefer to incentivize more private investment instead of government grants.

Other Republicans who voted for the bill, such as Sens. Thom Tillis of North Carolina, Lindsey Graham of South Carolina and Jerry Moran of Kansas, stood by their decisions but said they were also willing to consider adjustments to the law.

“As a practical matter, I think that most of the $52 billion … in the bill is probably already allocated,” Mr. Tillis said. “So if somebody wants to build a case to sweep back the remaining, I’m OK with that.”

He said businesses make long-term plans around tax credits, so any move to roll them back must be gradual or risk a chilling effect.

“You can have a reasonable ramp down, but you just can’t cold turkey it,” Mr. Tillis said. “To businesses, it’s unfair; it creates uncertainty, and they’ll go find another jurisdiction to set up shop.”

Of the chips law supporters whom The Times interviewed, Sen. Bill Hagerty, Tennessee Republican, was the only one to say he would be fine with repealing it.

“I had a great number of problems with the CHIPS Act, but there was something very important to me to pass alongside it; that was the permitting fix that we needed,” he said. “So I won’t be sorry to see a lot of this go away.”