US President Donald Trump publicly defended during his first official speech to Congress this week, the immediate revocation of chips Act, Bipartisan Law of 2022 which allocated US $ 52.7 billion in subsidies to boost domestic semiconductor production.
According to Trump, the legislation would be a “waste of money”, which should be redirected to the payment of national debt.
Harsh criticism of the previous government’s initiative
Trump has classified Chip Act as “terrible”, stating that benefited companies would be enjoying the resources without actually investing them.
In his view, the simple imposition of heavy tariffs would be sufficient to attract companies like Intel and TSMC to build their factories in the US. The president highlighted the recent US $ 165 billion TSMC investment announcement in Arizona as proof that companies would not need subsidies to install operations on American soil.
Impact on Intel and the chip industry
Among the companies affected by this possible revocation, Intel is the largest impaired by the size of the investments already compromised. The American giant has already received $ 2.2 billion out of a total of nearly $ 7.9 billion.
Therefore, canceling the legislation – as the president had already suggested in February – would endanger strategic projects ongoing, especially the “Ohio One” plant, which directly involves more than $ 8 billion in subsidies.
Chips ACT represented a strategic initiative for strengthening the economic and technological security of the United States. Its abrupt revocation can compromise critical investments already started by leading companies such as Intel, generating profound uncertainties about the future of the semiconductor industry in the country
Other strategic Intel investments include multibillion dollar collaboration with Amazon Web Services (AWS) for the development of advanced chips. The company has also worked to modernize its factories in the US and Europe so that its production is aligned with new technological demands.
However, cutting the Act chips subsidies can delay or even compromise these plans and slow down Intel’s resumption in the global market.
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Political and market reactions
In response to Trump’s statements, political leaders like Senator Jon Husted reaffirmed the strategic importance of the law, highlighting their role in protecting US interests against global competition, especially against China.
Already the Government of the State of Ohio, where is one of the largest projects of Intel, opted for a cautious stance, reinforcing the commitment of the company to the construction of the new plant independent of subsidies.
The possible revocation of chips ACT still needs to be discussed and approved by Congress, but already generates significant concerns about the continuity of investments and the economic and technological stability of the US semiconductor sector.
Source: Reuters
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Source: https://www.adrenaline.com.br/intel/trump-quer-fim-do-chips-act-impacto-na-intel/
