Sponsored By

Will CHIPS Act Momentum Continue Under the Next President?

The answer is yes, but there are areas where differences in implementation could surface.

Spencer Chin, Senior Editor

October 24, 2024

5 Min Read
The CHIPS Act will continue to play an important role in revitalizing US electronics manufacuturing no matter who is in office.
Early indications are that implementing varous CHIPS Act programs will be mostly unaffected no matter which presidential candidate is elected.William_Potter/ iStock / Getty Images Plus

For the US electronics industry, one of President Biden’s crowning achievements was the passage of the CHIPS Act in 2022, which set aside over $52 billion for companies to invest in new or expanded plants as well as research and development. While the results of some of these onshoring efforts will not be felt for several years until some of the new plants come online, some momentum has already been created.

Despite early objections by members of the Republican party, both parties put aside their differences in a bi-partisan effort that gives some hope to a steeply divided country going forward. Since the passing of the CHIPS Act in August 2022, companies have committed nearly $400 billion to invest in semiconductor projects across the US. The projects are slated to create 115,000 direct construction and manufacturing jobs, with further investments in workforce development and training to come. helping to ensure more chips are made in America by American workers.

The United States is on track to produce nearly 30% of the global supply of leading-edge chips by 2032, up from zero percent when President Biden and Vice President Harris took office. 

With a new administration to take over in January, the question arises as to whether the momentum created by the CHIPS Act’s passing two years ago will continue. Early indications are that both parties will continue to push forward the CHIPS Act, with Kamala Harris most likely staying on the path laid by President Biden, However, there are a few areas where political party philosophies could impact implementation of some programs.

Who will man these plants?

Regardless of which party wins, a major concern for the US semiconductor sector will be staffing the plants that come online the next few years, says analysts. The current wave of layoffs affecting the tech sector will not necessarily create a pool of workers for these facilities, given the specialized skills semiconductor manufacturing involves.

"Given that the U.S. manufactures a mere 12% of the global capacity for semiconductors, additional staff will need to be trained in order to bring these facilities online," said Michael Del Monte, an analysts for Seeking Alpha analyst, in a report in September. He noted that tech companies are allying with universities to overcome potential staffing issues, citing the example of Taiwan Semiconductor (TSMC) collaborating with Purdue University.

Republican platform

The Republican Party platform largely concurs with the Democratic Party’s objectives as far as reshoring. The Republican platform advocates bringing critical supply chains back to the US, strengthening buy and hire American policies, and restoring the US to being a manufacturing superpower.

While the CHIPS Act will help balance out the currently lopsided manufacturing imbalances in electronics, it will not complete alleviate the issues. Here, the political parties’ divergent views of trading with China, arguably the largest economic force outside the US, could continue to be a source of conflict. The Republican platform also calls for rebalancing trade by imposing tariffs on foreign-made goods, and revoking China’s favored nation status. But the Democrats appear to be trading more carefully here, aware the delicate trade balance and not wanting to escalate current conflicts.

That thinking appears to play out among voters as well. A recent Cato Institute survey found that 68% of registered Democrats agree that trading with China increases global stability and peace. However, the survey found that only 45% of Independent voters and registered Republicans think so.

Still, there are signs bi-partisan legislation could ease some of these disagreements. A bipartisan bill introduced in June by the House Science, Space, and Technology Committee called the Chip EQUIP Act (Chip Equipment Quality, Usefulness, and Integrity Protection Act of 2024) would mandate that companies that receive CHIPS and Science Act funding not purchase specialized manufacturing tools or equipment made by entities owned or controlled by the Chinese government, or other foreign entities of concern. The legislation would prevent an upsurge in companies buying semiconductor manufacturing equipment from Communist China, Russia, North Korea, and Iran.

Elsewhere, Republicans have found ways to nitpick away at some CHIPS Act provisions. For instance, several Republicans in June introduced a bill that would repeal some of CHIPS Act programs and positions embracing tenets of DEI (diversity, equity, and inclusion). The bill also aims to place limits on mandates imposed on entities seeking federal funds related to policies on diversity, mitigating climate change, environmental justice, community investment, and others.

In addition, how CHIPS Act funds are spent elsewhere in key areas such as research and development could bring out party divisions.

For instance, while the Democrats could favor programs that invest in alternative energies such as wind and solar, Republicans are more likely to favors funding research on military technology to thwart global rivals and build up the US defense industry.   

Trump’s off-the-cuff statements

Republican candidate Trump, while all in favor of making sure CHIPS Act measures are carried out, could stir additional controversy with his penchant for making off-the-cuff remarks not backed by facts. For instance, TSMC, the Taiwan-based semiconductor foundry, is along with Korea-based Samsung among offshore companies expanding their US presence with new or expanded plants that will create additional jobs for Americans. But Trump has criticized TSMC for helping  Taiwan of stealing the US semiconductor business.

Trump was quoted as saying, “Taiwan should pay us for defense. You know, we’re no different than an insurance company. Taiwan doesn’t give us anything,” he said, while suggesting that the US would have difficulty defending the island because of its distance, stating “Taiwan is 9,500 miles away (from the US). It’s 68 miles away from China.”

The fact is, though, that Taiwan built its impressive semiconductor manufacturing infrastructure without help from the US or any other source.

Republican Vice-Presidential candidate J.D Vance had to step in to clarify Trump’s remarks. In a report earlier this week, Vance was quoted as saying, “President Trump more than any political leader in my lifetime believes in bringing back American manufacturing and that includes semiconductors,” Vance said during a one campaign stop. “We have got to make more of this stuff in the United States of America and we’re thrilled about the expansion of operations in Arizona.” In April, TSMC was granted a $6.6 billion subsidy to expand its planned semiconductor fab in Phoenix, slated to begin operating later this decade.

About the Author

Spencer Chin

Senior Editor, Design News

Spencer Chin is a Senior Editor for Design News, covering the electronics beat, which includes semiconductors, components, power, embedded systems, artificial intelligence, augmented and virtual reality, and other related subjects. He is always open to ideas for coverage. Spencer has spent many years covering electronics for brands including Electronic Products, Electronic Buyers News, EE Times, Power Electronics, and electronics360. You can reach him at [email protected] or follow him at @spencerchin.

Sign up for Battery Technology newsletters

You May Also Like