chips act office faces staff cuts amid trump administration changes

2025-03-04 general

Washington, Tuesday, 4 March 2025.
The US Chips Act Office, tasked with managing a $52 billion chip subsidy program, is experiencing a significant staff reduction of approximately 40% due to workforce adjustments under the Trump administration. This move raises concerns about potential delays and diminished effectiveness in initiatives aimed at bolstering domestic chip manufacturing. It appears the previous administration’s policies are under review. This could impact the future of semiconductor production and research and development in the US.

Staff reductions at chips act office

The US Chips Act Office is set to terminate 60 employees [1]. Twenty employees previously resigned last week, and 40 probationary employees will be terminated [1][3]. Probationary employees are those who started their positions within the last two years [3]. This reduction represents approximately 40% of the office’s staff [1][3]. The Chips Program Office is responsible for managing the Chips and Science Act, which has a $52 billion budget [1][3]. The staff cuts raise concerns about potential delays in the distribution of these funds [1].

Trump’s stance on the chips act

President Trump has expressed his disapproval of the Chips Act [1]. The Act, signed into law by the previous administration, allocates $52 billion to boost American semiconductor production and research [1]. In response to the Act, companies like Intel and TSMC have pledged $400 billion in private investments to expand their supply chains in the U.S. [1]. However, these investments may be in jeopardy [alert! ‘the exact terms are still unknown’], as the Trump administration reviews conditions tied to Chips Act funding [1].

Potential policy shifts

The Chips Program Office has indicated that certain conditions may not align with President Trump’s executive orders and policies [1]. These conditions, which include allowing unionization of chip fab workers and paid parental leave, are now under review for all CHIPS Direct Funding Agreements [1]. Instead of relying on grants, Trump appears to favor using economic tariffs to encourage companies to move operations to the U.S. [1]. Commerce Secretary Howard Lutnick suggests this approach led to TSMC’s recent $100 billion investment in the U.S. [1].

TSMC’s investment and tariff avoidance

TSMC will invest $100 billion in the U.S. to expand its production capacity [1][4]. This investment includes plans for three new U.S. fabs [1]. Lutnick stated that America provided TSMC with 10% of the funds needed to build in the U.S. [1]. He added that TSMC’s investment is driven by the ability to avoid tariffs [1]. Former President Trump has suggested tariffs of 25% to 100% on semiconductors imported from Taiwan [8]. TSMC has been awarded up to $6.6 billion in direct funding under the CHIPS Incentives Program [8].

Impact on semiconductor companies

TSMC’s U.S. expansion is expected to benefit U.S. tech firms like Apple, NVIDIA, and AMD [8]. The company’s first U.S. plant began producing four-nanometer chips in late 2024 [8]. A second plant will focus on “A16” chip technology, with production starting by 2026 [8]. A third fab will manufacture two-nanometer chips by 2028 [8]. Intel, however, has delayed the opening of its Ohio chip fabrication facilities [6]. The opening for the first facility is now targeted for 2030, and the second in 2031 [6].

Concerns over ai competitiveness

Funding cuts are also impacting America’s AI competitiveness [7]. The Directorate for Technology, Innovation and Partnerships, created as part of the 2022 Chips and Science Act, saw its funding slashed by 30% in 2024, to $617.9 million [7]. Gregory Allen, director of the Wadhwani AI Center, stated that these cuts contradict other Trump administration priorities [7]. He added that cutting these grants is “robbing the future to pay the present” [7]. The NSF said it would reinstate 84 workers due to a court ruling, but the AI experts are not among those being brought back [7].

Bronnen

chips act government layoffs