Could President-elect Trump upend Arizona’s semiconductor industry?

PHOENIX (AZFamily)— Semiconductor manufacturers are racing to finalize agreements with the Biden Administration before the president leaves office because they are concerned about the future of the CHIPS and Science Act under President-elect Donald Trump.

Both TSMC and Intel are building giant chip manufacturing plants in Arizona with the help of more than 31 billion dollars in federal grants and loans from the CHIPS Act.

No state has gotten more initial funding commitments from the law than Arizona, but the money has yet to be paid out.

In the days before the election, Trump criticized the law and Republican leaders in Congress are discussing ways to reform it.

“That chip deal is so bad,” Trump said on the Joe Rogan Podcast in October.

Trump said the federal government was awarding billions to “rich companies.” Instead of incentives, he said the right way to spur domestic manufacturing was to impose tariffs.

“You have to make them spend money in the United States and those plants would open up. They’ll fund them. We don’t have to put up 10 cents,” Trump said.

U.S. Senator Mark Kelly said Trump’s comments amounted to a threat to undo the legislation.

“He wants to kill the CHIPS and Science Act. Killing that legislation is going to lay off tens of thousands of people in the state of Arizona,” Kelly said.

Last week, House Speaker Mike Johnson said Republicans “probably will” work to repeal the law. He later issued a statement saying Republicans would work to streamline the act, not repeal it.

Business leaders believe Trump would have limited authority to unilaterally upend the legislation, especially if companies reach agreements with the Biden Administration before the end of the year.

The Trump Administration could change regulations added by the Commerce Department, such as environmental regulations and requirements to use unionized labor and provide child care to workers.

TSMC has committed $65 billion to building its Phoenix manufacturing plants, the largest investment in Arizona history. The project is expected to create over 25,000 jobs, including 6,000 permanent manufacturing jobs.

TSMC issued a statement saying, “Our investment plan in the U.S. remains unchanged.”

Intel is in the midst of a $32 billion project in Chandler that is expected to create 3,000 manufacturing jobs and 7,000 construction jobs. The company expressed optimism, highlighting how the law aligns with Trump’s broader political goals.

“The idea behind the CHIPS and Science Act began in the first Trump Administration and maintains strong bipartisan support. Restoring America’s semiconductor manufacturing leadership is integral to the country’s economic competitiveness and national security,” an Intel spokesperson said via email. “As the only American company that designs and manufactures leading-edge chips, Intel has a critically important role to play, and we look forward to working with the Trump Administration on this shared priority.”

Both TSMC and Intel say their first manufacturing facilities should come online in the first six months of 2025.

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