Election 2024: CHIPS Act in crosshairs as Trump's tech agenda takes shape

The Democrats suffered heavily from voters unhappy with the Biden administration’s actions on the war in Gaza. Add to that a push towards more progressive politics under Kamala Harris and it was a night to forget for the Americans that backed Blue at the polls.

Tech and telco firms have already tasted four years of Trump, but what can they expect from the next four years?

Facing the chopping board under President Trump will be the CHIPS and Science Act, which provides federal subsidies to chipmaking firms to encourage them to produce hardware in the US.

In a pre-election appearance on the Joe Rogan Podcast, Trump said he would repeal the legislation, which he described as “so bad.”

What could have been put down to Trump simply wanting to tear apart legislation introduced by his predecessor was quashed when House Speaker Mike Johnson said “I expect that we probably will,” in response to whether the GOP would repeal the CHIPS Act.

BREAKING: I asked @SpeakerJohnson if he’ll try to repeal the CHIPS Act if Trump wins and they have control of Congress.“I expect that we probably will.”@RepWilliams responds: “I will remind him night and day how important the CHIPS Act is.” #NY22 @CitrusTVNews 🚨 pic.twitter.com/tUGwZMNMJM

— Luke Radel (@lukeradel) November 1, 2024

It’s yet to be determined whether a potential repeal of the CHIPS Act would mean for the hundreds of billions of dollars already signed in agreements with semiconductor producers like Samsung, SK Hynix, and TSMC.

During his Rogan rant, Trump appeared under the impression that the CHIPS Act related only to attracting manufacturing operating out of Taiwan when he claimed that Taiwan was “not going to give us the good companies.”

Subsidies provided under the CHIPS Act are not limited to companies operating in Taiwan. However, this did not prevent the former president from criticising the long-time US ally. His remarks centred on the idea that Taiwan does not compensate the US for its military support against China, which struck echoes of similar criticisms of Ukraine in 2019.

“They don't pay us money for the protection you know, the mob makes you pay money,” Trump said.

The CHIPS Act also provided federal support to US-based companies, with HSC, Infinera, and Wolfspeed among those to have secured funding to expand their US production efforts.

A potential repeal of the CHIPS Act could also harm one of the US’ biggest semiconductor firms: Intel.

The embattled company, which is already struggling to cut costs in a fight to save its precarious position, was set to be among the biggest recipients under the CHIPS Act, entitled to $8.5 billion in direct funding and a further $11 billion in loans to build out its domestic foundries, with and a further $3 billion designated for military hardware.

The Biden administration was racing to finalise the deals with Intel before the year ends, though persistent takeover rumours were impacting the process.

Should Trump repeal the CHIPS Act, it would mark yet another setback for Intel at a time when the once-great semiconductor producer finds itself stuck in the mire.

Likely to be near the forefront of the 47th presidential administration will be one Elon Musk, billionaire owner and CEO of Tesla, SpaceX, Starlink, X, and xAI.

Musk threw its financial weight behind Trump, with his America PAC handing out $1 million to voters across several swing states.

Describing himself as “dark, gothic MAGA” during a rally at New York's Madison Square Garden, the billionaire will likely have some form of role in Trump’s administration, though what is yet to be determined.

On the campaign trail, Trump said he would reward Musk with a cabinet role, suggesting a new position: Secretary of cost-cutting.

There are suggestions Musk may even appear in a consulting role, with Trump telling reporters he “certainly would” consider appointing the billionaire backer as an advisor.

Michael O'Rielly, a former commissioner of the US Federal Communications Commission (FCC), told Capacity prior to November 5th’s vote that Musk’s private ventures would likely force involvement to be more on the advisory side.

“This could include how and where to reduce federal regulations burdening private companies and specific advice on departments and agencies his businesses are most familiar, including Treasury, Commerce and the FCC.”

Remember tariffs? The protectionist mechanism was beloved by Trump and his team during his first presidency and will likely make a glorious return once he takes office in January 2025.

Trump previously imposed tariffs as part of his “America First” efforts on everything from shipments of steel and aluminium to solar panels and washing machines.

Trump’s tariffs led to a trade war between the US and China, though his love for tariffs effectively laid the groundwork for the Biden administration’s equally protectionist CHIPS and Science Act, which the president ironically wants to repeal.

Tariffs will continue in a second Trump term, with the President-Elect saying he would place tariffs on chips similar to how he plans to impose a 100% tariff on every car imported from Mexico if he wins the election, describing the concept as “more sophisticated, but no different.”

With all the talk of tariffs and repealing of federal subsidies important to many across the tech sector, Trump’s return to the White House may be a positive one for those in the 5G space.

Trump has previously championed the US as a leader in 5G, enshrining 5G development as a federal priority in his first term.

He also previously signed into law the Secure 5G and Beyond Act, which ordered government agencies to lay the groundwork on strategies for next-generation connectivity and telecommunications infrastructure.

Trump’s second term in office could herald more of the same, with a potentially renewed emphasis on national 5G networks and connectivity, a move that could be supported by one Elon Musk with his Starlink firm.

Former FCC commission O'Rielly previously told Capacity that during Trump’s prior presidency, he enjoyed an extensive track record in hiring sound and respected personnel in communications policy to work within the White House.”

“[Trump] is likely to select well-known, smart, and committed individuals who believe in the free market economy and the dire need to deregulate communications companies from unnecessary and costly government mandates,” O'Rielly said.

“Faster and more accountable nationwide deployment of broadband and advanced wireless networks, such as 5G, likely will be a priority, as well as eliminating added and costly burdens on affected industries by the Biden administration.”

Likely joining the CHIPS Act on the chopping block will be the Biden administration’s climate initiatives and subsidies.

A well-documented climate change denier, Trump would likely repeal or block much of the green initiatives that were part of the Biden administration’s Inflation Reduction Act — which only passed into law thanks to Harris’ tiebreaker vote.

The GOP manifesto proudly set the tone for the energy policies of Trump’s second presidency, with “DRILL BABY DRILL” all in caps alongside a pledge to make the US “energy independent again."

“The US has more liquid gold under our feet than any other Nation, and it's not even close. The Republican Party will harness that potential to power our future,” the manifesto read.

Any potential rollback of climate initiatives and subsidies for clean energy technologies would pose a potential knife in the heart for operators increasingly looking to switch to renewables.

Trump’s White House return will likely be heralded by some in the crypto community, with the GOP planning to end what it described as the “Democrats' unlawful and un-American crypto crackdown.”

The Republican election manifesto argued the right to mine Bitcoin was personal freedom: “Every American has the right to self-custody of their digital assets, and transact free from government surveillance and control.”

Trump would also oppose any attempt by the Federal Reserve to create a central bank for digital currencies. America’s central bank has examined the concept, though no official line is being pursued at this time.

US election 2024: What a Trump or Harris win would mean for tech and telcos

Trump threatens to dismantle Biden's chip strategy in favour of tariffs