Trump Administration Renegotiates Biden-Era Chips Act Grants, Says Commerce Secretary Lutnick
The Trump administration is actively renegotiating semiconductor manufacturing grants originally awarded under the Biden-era CHIPS and Science Act, according to U.S. Commerce Secretary Howard Lutnick. Speaking before the Senate Appropriations Committee on Wednesday, Lutnick indicated that some of these awards may be significantly altered or even cancelled as part of efforts to secure better terms for U.S. taxpayers.
“Some of the Biden-era grants just seemed overly generous, and we’ve been able to renegotiate them,” Lutnick told lawmakers, emphasizing that the renegotiations aim to deliver greater value to the American public. “All the deals are getting better, and the only deals that are not getting done are deals that should have never been done in the first place.”
$52.7 Billion CHIPS Act Under Review
The $52.7 billion CHIPS and Science Act, signed by President Biden in 2022, was designed to bolster domestic semiconductor manufacturing and reduce reliance on Asia, particularly Taiwan and South Korea. Under the program, billions of dollars in grants were awarded to both U.S. and foreign chipmakers, including Taiwan’s TSMC, South Korea’s Samsung and SK Hynix, as well as U.S.-based Intel and Micron.
Though many of these awards were signed before Biden left office, most of the funds have yet to be fully disbursed. The grant payments are generally structured to be released as companies meet specific production and investment milestones tied to their U.S. plant expansions.
TSMC Award Revised Amid Expanding U.S. Investment
Lutnick cited Taiwan Semiconductor Manufacturing Co. (TSMC) as an example of successful renegotiation. Under the original agreement, TSMC was awarded $6 billion to support its U.S. manufacturing expansion. Lutnick revealed that TSMC subsequently increased its planned investment from $65 billion to $165 billion, while still receiving the same $6 billion in federal funds.
Although TSMC confirmed in March that it would invest an additional $100 billion in the U.S., the company has not commented on whether the new investment was directly tied to renegotiated CHIPS Act terms.
White House Seeking Delays and New Terms
The renegotiation efforts are not new. In February, Reuters reported that the White House was already seeking to renegotiate several awards and delay some upcoming disbursements to ensure better returns on government spending.
Lutnick’s comments suggest that the Trump administration intends to continue scrutinizing past agreements to maximize taxpayer value and may block deals it deems wasteful or excessive.
AI Computing Capacity Also a Focus
During the hearing, Lutnick also addressed concerns about the global race for artificial intelligence computing capacity. He emphasized the administration’s commitment to ensuring that over 50% of global AI compute power remains based in the United States. This statement comes amid criticism of a Trump administration deal allowing the United Arab Emirates to purchase advanced American AI chips, raising fears about exporting critical technology.
