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Trump Administration Renegotiates Biden-Era Chips Act Grants, Says Commerce Secretary Lutnick

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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.

Wolfspeed Appoints Robert Feurle as CEO Amid Industry Challenges

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Chipmaker Wolfspeed (WOLF.N) has named Robert Feurle as its new CEO, effective May 1, replacing interim chief Thomas Werner, who will resume his role as chairman. Feurle, a seasoned semiconductor executive, previously held key positions at Micron Technology, Infineon Technologies, and ams-OSRAM AG.

The leadership change follows the board’s decision to oust former CEO Gregg Lowe in November without cause. Wolfspeed has been restructuring its operations, including facility closures, to improve profitability amid slowing demand from automotive, industrial, and energy markets.

Feurle expressed confidence in revitalizing the company’s operating plan and accelerating its path to positive free cash flow. Wolfspeed continues to focus on silicon carbide technology, with significant investment in a 200-millimeter silicon carbide fab to enhance efficiency and production capacity.

Despite the announcement, Wolfspeed’s shares fell about 2% in early trading.

Micron’s Shares Drop as Margin Forecast Dampens AI Prospects

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Micron Technology’s shares dropped 8% on Friday after the company issued a disappointing margin forecast, overshadowing strong quarterly revenue expectations driven by growing demand for its semiconductors used in artificial intelligence applications.

Despite being one of only three major suppliers of high-bandwidth memory (HBM) chips for data-heavy AI tasks, Micron’s forecast for adjusted gross margin fell below expectations. The company cited lower pricing for consumer memory chips, particularly NAND flash, as a key factor affecting profitability. NAND flash memory chips, used in products like smartphones and personal computers, remain in oversupply due to aggressive buying during the pandemic, which has led to weak pricing.

Micron projected a third-quarter adjusted gross margin of around 36.5%, slightly below analysts’ forecast of 36.9%. This would represent a 3 percentage-point drop from the previous quarter. The company’s chief business officer, Sumit Sadana, acknowledged the ongoing challenges in the NAND market, with the oversupply continuing to put pressure on margins. Micron has also been reducing NAND production, which has led to underutilization and higher fixed costs per unit.

However, the company’s prospects in AI remain strong, with a forecasted revenue boost driven by high demand for its HBM chips, particularly from key players like Nvidia. Morningstar analysts highlighted HBM as a key growth driver for Micron, with AI and data center demand expected to continue.