# **The Prospects for Tech Innovation in the US May Dwindle if Trump Repeals the CHIPS Act**
## **Introduction**
The CHIPS and Science Act, a $280 billion bipartisan legislation enacted by President Joe Biden in 2022, aimed to enhance semiconductor production within the United States and reinforce the nation’s status as a frontrunner in research and innovation. However, former President Donald Trump has indicated his plans to abolish the CHIPS Act, denouncing it as a “horrible, horrible thing” and claiming it squanders taxpayer resources.
Trump’s alternative proposal—implementing a 25% tariff on semiconductor imports—may have profound implications for the technology industry in the US. With billions already committed to semiconductor production and research, the possible repeal of the CHIPS Act poses the risk of stalling innovation, disrupting supply chains, and undermining America’s competitive advantage in emerging technologies like artificial intelligence (AI), quantum computing, and 6G communications.
## **The CHIPS Act: An Engine for US Semiconductor Expansion**
The CHIPS Act was central to Biden’s economic plan, intended to diminish dependency on foreign semiconductor suppliers while bolstering domestic manufacturing. The legislation earmarked $52.7 billion in subsidies for semiconductor companies, with prominent recipients including **Taiwan Semiconductor Manufacturing Co. (TSMC), Micron, Intel, Nvidia, and Samsung Electronics**.
According to the **Semiconductor Industry Association**, the CHIPS Act has already triggered **$450 billion in private investments**, enhancing semiconductor output across **28 states** by mid-2024. Businesses like **Micron and TSMC have vowed to invest $100 billion each** in US-based chip manufacturing facilities, showcasing the law’s success in drawing substantial long-term investments.
## **Trump’s Approach: Tariffs Rather Than Subsidies**
Rather than offering financial support to semiconductor firms, Trump has suggested a **25% tariff on all semiconductor imports**, which might commence as early as **April 2, 2025**. Although this strategy aims to deter dependence on foreign chips, industry analysts caution that tariffs could **inflate costs for US companies**, disrupt supply networks, and diminish the competitiveness of domestically produced chips in the global arena.
Furthermore, the uncertainty regarding the CHIPS Act’s future has already caused delays in semiconductor initiatives. **Intel, for instance, has curtailed expenditures on anticipated facilities** due to worries surrounding CHIPS Act funding, as reported by **AP News**.
## **The Risks to the National Science Foundation’s TIP Directorate**
In addition to focusing on semiconductor production, the CHIPS Act initiated the **Directorate of Technology, Innovation, and Partnerships (TIP)** within the **National Science Foundation (NSF)**. This new entity was established to hasten the conversion of groundbreaking research into viable applications, ensuring that the US remains a leader in technological innovation.
Biden designated **$20 billion** for TIP, fostering research in fields like **AI, biotech, quantum computing, and advanced manufacturing**. Nevertheless, under Trump’s leadership, the **Department of Government Efficiency (DOGE)** has started reducing NSF funding, with TIP facing the most significant cuts.
A particularly troubling development is the **dismissal of probationary federal workers**, many of whom played vital roles in TIP’s operations. According to insiders at NSF, one such employee was the sole person trained to oversee TIP’s **automated tracking system**, essential for efficiently distributing research funding. The loss of this key individual could result in **delays in funding approvals that may last for years**, greatly hindering US innovation.
## **Legal Disputes and Workforce Instability**
The sudden layoff of NSF personnel has led to legal disputes, resulting in a **US district judge ruling that the cuts were unlawful**. While the court mandated the reinstatement of the affected employees, many may opt not to return due to **eroded trust and job uncertainty**.
Industry leaders and researchers are concerned that these disturbances could drive top US scientists to pursue opportunities overseas. Nations like **China and Denmark** are actively recruiting displaced US researchers, providing stable funding and long-term career prospects.
## **Industry and Academic Leaders Raise Concerns**
In **March 2025**, six prominent organizations representing over **305,000 professionals in computing, IT, and technical innovation** sent a letter to Congress, cautioning that funding freezes and workforce reductions could result in **”long-lasting detrimental effects on US competitiveness, national security, and economic health.”**
The **Computing Research Association (CRA)** labeled the NSF funding cuts a **”self-inflicted hurdle”**, asserting that NSF’s **$10 billion annual contribution to computing research** supports a **$2 trillion technology industry**. They argued that slashing NSF funding would be **”a costly error, far exceeding any temporary savings.”**
## **The Global Competition for Technological Dominance**
The potential reversal of the CHIPS Act arrives at a moment when **China is rapidly progressing in AI, quantum computing, and semiconductor production**. China’s AI model **DeepSeek** has already shown capabilities that compete with top US
