Explainer: The CHIPS Act and Arizona 

Republican vice-presidential nominee J.D. Vance on Tuesday sought to clarify remarks by former President Donald Trump about the former president’s apparent displeasure with the CHIPS and Science Act and investment by Taiwan in the United States semiconductor sector.  Representatives of the business community also reestablished the facts of the CHIPS Act and Arizona’s semiconductor sector. 

What Trump said: In June during an interview with Bloomberg Businessweek, former President Donald Trump claimed that Taiwan had taken “almost 100%” of the industry from the United States. “We should have never allowed that to happen,” he said. 

Those remarks sparked concern the former president was either opposed to the CHIPS Act or was unfamiliar with the bill’s positive effect on the U.S. economy and with the U.S.-Taiwan relationship.  

What Vance said: “President Trump more than any political leader in my lifetime believes in bringing back American manufacturing and that includes semiconductors,” Vance said at a Tuesday campaign stop in Peoria. “We have got to make more of this stuff in the United States of America and we’re thrilled about the expansion of operations in Arizona.” 

Then the vice presidential nominee went on to clarify that what Trump meant to criticize was that the former president believes the current administration makes a political calculation in determining what companies must do as a condition for funding. 

What the CHIPS and Science Act does:

• Increases domestic semiconductor production: Allocates $52.7 billion in subsidies, grants, and loans to support chip manufacturing, R&D, and workforce development in the U.S.
  
• Creates a national semiconductor technology center: A public-private consortium for R&D to strengthen the U.S. semiconductor ecosystem.
  
• Boosts STEM education and workforce development: Invests in expanding STEM education, targeting underrepresented groups and areas of the country with limited access to these resources.
  
• Supports research in critical technologies: Funds research in fields such as artificial intelligence (AI), quantum computing, and advanced manufacturing technologies.
  
• Enhances supply chain resilience: Aims to reduce reliance on foreign-made semiconductors, particularly from countries like China.
  
• Incentivizes private sector investment: Provides tax credits to encourage companies to build semiconductor plants and create jobs in the U.S.
  
• Strengthens U.S. leadership in innovation: Directs investments into national labs and institutions like the National Science Foundation to enhance research in emerging technologies. 

The act was a response to the pandemic-induced global chip shortage, a concern about overreliance on foreign manufacturers, and growing competition from countries like China in advanced tech sectors. 

The CHIPS Act and Arizona’s growing semiconductor sector: 

Arizona investments announced by TSMC:

• May 2020, announced a $12 billion fabrication plant in north Phoenix.
  
• December 2022, announced plans for a second fab, bringing total investment to $40 billion.
  
• April 2024, joined the Department of Commerce in announcing $6.6 billion in CHIPS Act funding and plans for a third fab, bringing total investment by TSMC in the U.S. to more than $65 billion.
  
• These investments are anticipated to create 6,000 jobs.  

New Arizona investments announced by Intel:

• March 2021, announced an additional $20 billion investment to expand operations at the company’s Ocotillo campus in Chandler that includes the construction of two advanced fabs, bringing the company’s investment in Arizona to more than $50 billion over more than four decades.
• March 2024, Intel and the Commerce Department entered an agreement for $8.5 billion in CHIPS Act funding.  

What the business community says: Danny Seiden, the president and CEO of the Arizona Chamber of Commerce & Industry, on Tuesday reestablished the facts about the CHIPS Act during an interview with Arizona’s Morning News on KTAR. 

“All of our TSMC investment in Arizona was originally negotiated and began under President Trump when he was in office, the first term,” Seiden said. “Of course, the executive has a lot of control over how some of these dollars are handed out, but I have utmost confidence that no sitting president would do anything like that. We are allocating dollars to kind of onshore this chip manufacturing. So, in a way, we are bringing chip manufacturing back to America and to Arizona.” 

The year ahead: TSMC says it anticipates producing chips at its Phoenix facility in 2025, with the company’s second fab in north Phoenix set to begin production in 2026 or 2028.