US Secretary of Commerce pick says he plans to stay on course with CHIPS Act: report

With the Biden Administration poised to hand off the CHIPS Act torch to President-elect Donald Trump's team next week, the pick for the new U.S. Secretary of Commerce has indicated he plans to stay the course, according to a report today by Bloomberg.

Cantor Fitzgerald CEO Howard Lutnick is Trump's pick to replace outgoing Commerce Secretary Gina Raimondo. She said Lutnick is committed to the initiative, according to the report.

CHIPS has already slated about $39B to more than two dozen semiconductor firms through grants along with additional loans and tax breaks to stimulate domestic semiconductor manufacturing and research. It was created to bring semiconductor supply chains back to the U.S. while creating jobs and protecting national security. Those receiving the largest grants include GlobalFoundries (NASDAQ:GFS) $1.5B, Intel (NASDAQ:INTC) $7.86B, TSMC (NYSE:TSM) $6.6B, Samsung (OTCPK:SSNLF) $9B, Micron Technology (NASDAQ:MU) $6.3B and Texas Instruments (NASDAQ:TXN) $1.6B.

However, two major recipients of the funding, Intel and Samsung, have encountered some recent setbacks.

Apparently, some Biden officials mulled the idea of GlobalFoundries acquiring Intel, Bloomberg reported. However, the idea hasn't "progressed much past a thought exercise."

However, analysts have said that while the CHIPS Act could be paused while the Trump administration reassesses the Act, they don't expect the program to be scrapped.

"Our discussion with experts has led us to believe that the Trump administration, may not 'repeal' the CHIPS Act, but will largely rebrand the bill and maintain the original essence of it," said Needham analysts Charles Shi and Ross Cole. "After all, the CHIPS Act was initially drafted during Trump's first term, and was one of the most bipartisan bills passed during the Biden administration. We expect policy continuity of the CHIPS Act, which will be a positive for Semicap."