US To Renegotiate Chips Act Awards

The Trump administration is seeking to renegotiate existing awards to semiconductor manufacturers under the US Chips and Science Act and may delay some approaching disbursements, Reuters reported.

The administration plans to assess and change current requirements under the law, after which it intends to renegotiate some of the contracts, the report said.

GlobalWafers, a Taiwanese manufacturer, said the Chips Programme Office told it that “certain conditions that do not align with President (Donald) Trump’s executive orders and policies” were under review for companies with direct funding.

The company said it had not been notified directly by the administration of any changes to the conditions of its contract, under which it is to receive $406 million (£322m) for projects in Texas and Missouri after completing milestones this year.

Problematic conditions

The administration is reportedly concerned about specific requirements added to many of the Chips Act contracts by the previous administration, including that recipients use unionised labour to build factories and help provide affordable childcare for factory workers.

Another concern is reportedly that many of the companies receiving funds to encourage them to locate plants in the US are also planning significant expansion in other countries, including China.

The law, which allotted $39bn in subsidies to encourage chip manufacturing within the country, places restrictions on recipients but allows some investments in China.

Intel, which received a major Chips Act award last March, announced in October a $300m investment into a Chinese assembly and test facility.

Intel, TSMC, Samsung Electronics and SK Hynix, all of which are major Chips Act recipients, also have major manufacturing facilities in China.

Intel said it has so far received two payments amounting to $2.2bn in Chips Act subsidies, while TSMC said it has received $1.5bn in funds as per its agreement with the previous administration.

Other companies with deals include Hemlock Semiconductor, Bosch, Micron, GlobalFoundries and Texas Instruments.

Domestic investment

Samsung, the world’s largest memory-chip maker, has said it plans to invest more than $40bn to build two new advanced chip manufacturing facilities in Taylor, Texas, for which it received a Chips Act award of up to $6.4bn in grants.

The facilities include a $17bn chip plant that Samsung had announced in 2021, a second factory, an advanced packaging facility and a research and development centre.