The CHIPS Act and the Government That Bought Intel

In May 2020, an under secretary of state named Keith Krach brokered a $12 billion deal to bring TSMC, the Taiwanese company that makes most of the world's advanced chips, to Phoenix. That single announcement became the seed of what, two years later, would be the largest piece of American industrial policy since the space race. Senators Chuck Schumer and Todd Young grafted Krach's chip plan onto an unrelated research bill called the Endless Frontier Act, the House and Senate spent eighteen months trading drafts, and on August 9, 2022, Joe Biden signed the CHIPS and Science Act on the South Lawn. The Senate had passed it 64 to 33 with seventeen Republicans voting yes, including Mitch McConnell. Bernie Sanders called it a blank check.

The headline number was $280 billion in authorisations. The number that mattered was $52.7 billion in actual appropriations: $39 billion in direct subsidies for fabs built on American soil, a 25 percent investment tax credit on manufacturing equipment, $13 billion for research and workforce training, and $2 billion for the Defense Department to fund military-grade microelectronics. Recipients were barred for ten years from building anything more advanced than 28-nanometre chips in China or Russia. Companies announced almost immediately. Micron pledged up to $100 billion in upstate New York with a $5.5 billion state tax credit attached. Intel said it would put $20 billion into a fab outside Columbus, with a path to $100 billion across eight plants. Samsung committed $17 billion to Taylor, Texas. TSMC raised its Arizona commitment from $12 billion to $40 billion in December 2022, with Biden showing up for the photograph.

Then almost nothing happened for sixteen months.

By January 2024, the Wall Street Journal reported that the Commerce Department had finalised exactly two small grants, neither of them for advanced chips. The bottleneck was the National Environmental Policy Act, which requires a federal review before any grant money is dispersed. A federal analysis found that NEPA reviews from 2013 to 2018 took an average of 4.5 years. Critics calculated that each year of delay added roughly five percent to the cost of building a fab. The CHIPS Program Office, run by Michael Schmidt, was staffed mostly with bankers and consultants pulled from Wall Street, which Senator Elizabeth Warren and Representative Pramila Jayapal flagged as a conflict-of-interest problem in a letter to Secretary Gina Raimondo.

The labour shortage was worse. One study estimated the United States needed 300,000 additional skilled semiconductor workers just to staff the projects already announced. TSMC said building in Arizona was costing fifty percent more than building in Taiwan, and the company began shipping Taiwanese technicians over for twelve to eighteen months of training. The Arizona Building and Construction Trades Council asked Congress to block visas for 500 of them and accused TSMC of disrespecting American workers. TSMC slipped its first Arizona fab from 2024 to 2025, its second from 2026 to 2027, and the third — announced in April 2024 to make 2-nanometre chips — won't break ground until 2028. Intel's Ohio fab slipped from 2025 into 2026 and then further. By contrast, TSMC built a comparable plant in Kumamoto, Japan, in twenty months by running 24-hour shifts with welcoming local unions and Taiwanese teachers brought in for the engineers' children.

In spring 2024, Raimondo finally moved. March brought $8.5 billion in grants to Intel for fabs in Chandler, New Albany, Hillsboro and Rio Rancho. April brought $6.6 billion to TSMC for the third Arizona fab, $6.4 billion to Samsung for Taylor and Austin, and $6.1 billion to Micron for Clay, New York and Boise, Idaho. By mid-November 2024, though, only the Polar Semiconductor and TSMC agreements had actually closed. The Biden administration scrambled in its final weeks and finalised GlobalFoundries' $1.5 billion deal on November 20 and Intel's award — quietly reduced from $8.5 billion to $7.86 billion to claw back $640 million for the Defense Department's secure enclave program — on November 26.

Then Donald Trump returned to office. In his March 2025 joint address to Congress he asked Speaker Mike Johnson to "get rid" of the CHIPS Act. Johnson did not. Instead the administration kept the act, added ten percentage points to the manufacturing tax credit, and in August 2025 did something no previous American government had done to a Fortune 500 firm in peacetime. Commerce Secretary Howard Lutnick converted $8.9 billion in unpaid Intel grants and $3.2 billion already awarded under the secure enclave program into 433.3 million shares of Intel common stock at $20.47 each — a 9.9 percent equity stake worth $11.1 billion. The same month, Lutnick moved to close Natcast, the public-private nonprofit set up to run the National Semiconductor Technology Center under Synopsys veteran Deirdre Hanford, citing alleged Biden-era cronyism and denying it $7.4 billion in promised funding. Layoffs began in September.

The numbers Congress will remember are the ones the Semiconductor Industry Association keeps. By December 2025 it counted more than $630 billion in private investment across 140 projects in 28 states, projected to create about 500,000 jobs. Boston Consulting Group projected the United States would hold 28 percent of the world's advanced-logic chip manufacturing by 2033, against an 8 percent baseline if the act had not passed. Counties that voted for Joe Biden in 2020 received $227.9 million per county on average from the act; counties that voted for Donald Trump received $44 million. Arizona drew the largest single state-level investment: TSMC's $65 billion, more than 11,000 projected jobs, and the first American site whose chip yields, by October 2024, surpassed those of TSMC's home fabs in Taiwan.