U.S. Commerce Secretary Confirms CHIPS Act Renegotiations, Seeks Greater Domestic Investment Amid Security Concerns
Washington, D.C. – U.S. Commerce Secretary Howard Lutnick has confirmed that the Trump administration is renegotiating agreements with semiconductor manufacturers under the CHIPS and Science Act, aiming to secure better terms for American taxpayers and increase domestic investment.
Speaking before the Senate Appropriations Committee, Lutnick emphasized that the renegotiations are focused on ensuring that federal dollars deliver maximum value. “Are we renegotiating? Absolutely, for the benefit of the American taxpayer, for sure,” Lutnick said. “All the deals are getting better, and the only deals that are not getting done are deals that should have never been done in the first place.”
The CHIPS Act, signed into law in 2022, originally allocated $52.7 billion to boost domestic semiconductor manufacturing and research, with broader funding initiatives totaling over $280 billion across various technology sectors. Despite these efforts, the U.S. share of the global semiconductor market has recently fallen below 40%, raising concerns about national security and technological competitiveness.
Lutnick highlighted specific changes, including reducing federal funding to “4% or less” of project values, down from what he described as “overly generous” previous levels of up to 10%. He cited Taiwan Semiconductor Manufacturing Co. (TSMC) as an example, noting that after renegotiation, TSMC committed to investing an additional $100 billion in U.S. manufacturing, on top of its previously announced $65 billion investment.
In a parallel development, the Trump administration has ordered U.S. chip design software firms—including Synopsys, Cadence, and Siemens EDA—to halt sales and services to Chinese clients. These companies collectively control about 80% of China’s chip design market, and the move has already triggered significant stock price declines for Synopsys and Cadence, with shares dropping over 11% and 9.5%, respectively. This measure is part of a broader effort to protect U.S. technological advancements and curb AI chip smuggling to China, as highlighted by the recently emphasized Chips Security Act.
Lutnick also addressed the administration’s new guidance on AI chip exports, stating that the previous Biden-era AI diffusion rule was confusing and illogical. The new policy will allow allies to purchase advanced AI chips, provided they are run by approved American data center operators.
The renegotiation efforts come as the Commerce Department proposes a 16.5% budget cut, including a $325 million reduction to the National Institute of Standards and Technology, which oversees CHIPS Act funding programs. The administration’s goal is to ensure that more than 50% of global AI computing capacity is located in the U.S., reinforcing national security and economic leadership.