CHIPS Act Repeal May Drive U.S. Semiconductor Market Share to Single Digits

Key Takeaways

Concerns grow over potential repeal of the CHIPS and Science Act by former President Trump, which could significantly impact the U.S. semiconductor market.
Without the CHIPS Act, U.S. semiconductor market share is projected to drop to 8%, compared to a potential increase to 14% with the Act.
Major companies like Intel and TSMC rely on the CHIPS Act for funding, with Intel’s expansion plans in Ohio now under threat.

Uncertainty Around the CHIPS Act’s Future

Recent concerns have emerged regarding the future of the CHIPS and Science Act under the administration of former President Donald Trump. A report from Liberty Times, citing Bloomberg, indicates that if Trump revokes the CHIPS Act, the U.S. semiconductor market share could plummet to single digits. The Semiconductor Industry Association in Washington projects that U.S. semiconductor manufacturing capacity is on track to triple by 2032, increasing its global market share from 10% to 14%. However, without the support of the CHIPS Act, it could decline to only 8%.

The passage of the CHIPS Act led to a surge in spending on semiconductor factory construction in the U.S., benefitting even companies that did not receive direct subsidies. A key feature of the Act is a 25% tax credit for manufacturing projects, serving as the main incentive for businesses, compared to grants that cover only 10% to 15% of project costs.

There is growing uncertainty regarding the continuity of the CHIPS Act, as terms permit the government to delay or reclaim funds under certain circumstances. Commerce Secretary Howard Lutnick has yet to affirm the commitment to maintaining existing contracts, causing additional concern among stakeholders reassessing planned investments.

Despite potential changes, the Trump administration is still legally required to allocate the funds designated by Congress for the CHIPS Act, which includes USD 39 billion in manufacturing incentives through fiscal year 2026. The funding will primarily benefit four leading semiconductor producers: Intel, TSMC, Samsung Electronics, and Micron, with Intel being the largest anticipated recipient. The rumors of the Act’s repeal raise significant apprehensions about the future of Intel’s planned new plants in Ohio.

Meanwhile, TrendForce reports that TSMC is increasing its investment in U.S. advanced semiconductor production to a total of USD 165 billion, with mass production expected to begin after 2030 if the planned facilities proceed on schedule. The U.S. aims to bolster its semiconductor capacity further, anticipating a 22% share of the global market by 2030.

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