Investing.com-- U.S. Commerce Secretary could withhold promised grants under the CHIPS Act in a bid to increase investments by major chipmakers in the U.S., Bloomberg reported on Tuesday.
Lutnick wants chipmakers that won awards from the Biden-era Chips and Science Act- which include Samsung Electronics (KS:005930), Intel (NASDAQ:INTC), and SK Hynix- to follow peer TSMC (NYSE:TSM) in investing more in building U.S. manufacturing facilities, the Bloomberg report said, citing eight people with knowledge of the matter.
TSMC recently pledged $100 billion to build U.S. plants, in addition to a prior $65 billion pledge, which covers a major chipmaking facility in Arizona. Production at the facility began on a limited scale in late-2024.
Lutnick could scrap subsidies that have already been promised to chipmakers, the Bloomberg report said, and has also expressed interest in expanding a separate 25% tax credit from the CHIPS Act. The tax credit is likely worth more to most companies than direct funding awards, the Bloomberg report said.
But expanding the tax credit will require Congressional approval.
Biden had approved nearly $34 billion in grants under the CHIPS Act.
President Donald Trump has repeatedly criticized the CHIPs Act, claiming that it was a waste of money that could instead be used in repaying debt. Trump on Monday signed an executive order setting up a new entity to take over the CHIPS Act program and promote corporate investment in the U.S.
Lutnick’s consideration for CHIPS grants is largely in line with Trump’s agenda to bring more manufacturing back to the U.S., with Trump’s tariffs also aimed at evoking a similar result. TSMC is so far among the biggest companies to have promised more U.S. production to appease Trump. Automaker Hyundai (OTC:HYMTF) had also recently announced increased investment in the U.S.
Trump's focus on chipmaking also comes as he looks to further the U.S.' edge in artificial intelligence, with the fast-growing industry serving as a major source of chip demand. Majors such as Nvidia (NASDAQ:NVDA) and TSMC have been a key beneficiary of this trend.