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The CHIPS Act is a US Federal law passed in 2022, which provides funding of $52 billion to boost US semiconductor manufacturing. It was brought back to the spotlight after President Trump called on Congress this week to repeal the Act.
Intel is a major company in the CHIPS Act funding and as a result, faced a major sell-off on March 4, declining almost 20%. ⁽¹⁾
Latest News and Reason for Repeal
The CHIPS Act was passed to support US semiconductor presence and reduce reliance on foreign semiconductors, especially from Asia.
During the Congress hearing on March 4, Trump criticized the CHIPS Act’s strategy of directly funding semiconductor companies and praised recent pledges to significant growth investments from well-known tech firms like Apple and TSMC.
Trump also stated that tariffs would be more effective to support domestic manufacturing, proposing that surplus funds could be used to reduce national debt. ⁽²⁾
Despite the push for repeal, the Act has already made huge investments. Over $36 billion has been given to Intel, TSMC and Micron. Trump’s repeal push came after he announced a $100 billion investment from TSMC for five new factories in the US. TSMC’s Arizona projects received $6.6 billion from the CHIPS Act. ⁽³⁾
Impact On Intel Stock
Intel is the largest semiconductor manufacturer in the US and has received the largest payout from the CHIPS Act. Namely, a $7.9 billion grant that will help the company build new plants across the US.
Intel’s stock has experienced fluctuations tied to CHIPS Act developments. On February 11, 2025, Intel surged after Vice President JD Vance vowed to prioritize US-made AI chips, with Intel gaining 6% that day.
That rally continued into mid-February, with Intel showing a 23% weekly gain, the largest since 2000, fueled by optimism about domestic production. However, Trump’s call to end the law introduced a wave of bearish pressure. Intel stock declined almost 20%, erasing most of its February gains. ⁽⁴⁾
Amid Trump’s new comments, Intel still faces other challenges, including delays to finish building its plant in Ohio. Previously, it was expected to finish by 2026 but has now been pushed to 2030. This delay along with Trump’s push for repeal have built uncertainty on the company’s performance. ⁽⁵⁾
Intel is also still without a CEO. Reports indicate the Trump administration has proposed breaking out the company’s struggling foundry segment and having it run either entirely by TSMC or by a consortium of companies. ⁽⁶⁾
Broader Market View
President Trump’s call to repeal the CHIPS Act is still uncertain due to its $400 billion funding in private investments and bipartisan roots. Semiconductor stocks, especially Intel, TSMC and Nvidia, will be watched closely by traders and investors.
These companies may have to face hefty tariffs with uncertainties over funding cuts and contract revisions which are under review by the Trump administration. ⁽⁷⁾
Reports indicate that tariffs are likely to raise costs and disrupt supply chains, but markets are optimistic that the Act’s national security and job creation benefits can outweigh short-term policy shifts. ⁽⁸⁾
