U.S. President Donald Trump called on lawmakers to repeal the CHIPS Act in a Tuesday evening speech to Congress.

“Your CHIPS Act is a horrible, horrible thing,” Trump said. “We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it.”

Trump went on to say that Congress should end the semiconductor subsidy program and use unspent funds to “reduce debt or any other reason.” The CHIPS Act allocates $39 billion in grants to the U.S. chip manufacturing sector along with loans, tax breaks and other incentives. An additional $11 billion is set aside for semiconductor research and development.

According to Bloomberg, the Biden administration awarded more than 85% of the funds the CHIPS Act had set aside for chip manufacturing. The financing was awarded through binding agreements that the U.S. Commerce Department signed with 20 chipmakers. Those companies include Taiwan Semiconductor Manufacturing Co., which makes the world’s most advanced processors, as well as fab operators such as GlobalFoundries Inc. that use legacy manufacturing methods.

In January, Commerce Secretary Howard Lutnick announced plans to review CHIPS Act awards. According to Bloomberg, Lutnick has asked the government officials in charge of the program about the rationale behind the awards and whether funding can be withdrawn. 

CHIPS Act financing agreements are overseen by a Commerce Department office. Over the past week, the Trump administration has reportedly dismissed dozens of staffers from the office. The layoffs don’t affect the teams tasked with negotiating financing awards and checking whether chipmakers meet the criteria to receive the funds. 

In yesterday’s speech, Trump didn’t specify whether he would attempt to claw back money already disbursed to chipmakers. TSMC, which won $6.6 billion in CHIPS Act grants last year, has already received $1.5 billion from the government. The company’s access to the remaining funds is contingent on future fab construction and manufacturing milestones.

Last November, House Speaker Mike Johnson stated that Republicans “probably will” try to repeal the CHIPS Act. He later walked back the comment, saying “there could be legislation to further streamline and improve the primary purpose of the bill.” Some Republicans have reportedly indicated they wish to change the law’s labor-friendly provisions and environmental requirements.

The Commerce Department office that oversees CHIPS Act awards is reportedly preparing a list of potential changes to the program. It’s believed that some of the adjustments, which are described as “minimally disruptive,” focus on the funding application process. Officials are also exploring changes to financing contracts with chipmakers.

Image: White House