Trump can't quickly or easily kill the CHIPS Act, but he can fire the workers funded by it

Reported layoffs suggest R&D functions may be hobbled, fab subsidies also at risk

Comment US President Donald Trump has made it plain he’s not a fan of the $53 billion CHIPS and Science Act that funds semiconductor manufacturing and research on American soil – and now it appears he’s decided to make substantial staff cuts at the agencies that administer it.

Reports in Axios and Bloomberg claim that almost 500 staff at the US government's National Institute of Standards and Technology, aka NIST, are about to be let go, among them workers responsible for running the agency’s $11 billion semiconductor research and development program that was funded under the Biden-era CHIPS Act. The layoffs are also expected to gut the US AI Safety Institute, which was responsible for evaluating the security of emerging AI models.

Significant cuts to CHIPS staff could hobble the agency's ability to deliver on its mission of distributing funds to subsidize the construction of semiconductor fabs in the USA and funding domestic R&D, all of which is supposed to help the country rely substantially less on foreign factories. Both of those goals had bipartisan support when the CHIPS Act passed, we note.

The Trump administration’s plans for the future of NIST are not clear. The agency is part of the Commerce Department, whose incoming leader Howard Lutnick was only confirmed as Secretary on Wednesday. NIST’s Director Dr Laurie E. Locascio left the role in late 2024, and the agency is currently led by Acting Director Craig Burkhardt.

NIST declined to comment on the reported layoffs and any potential impact on CHIPS Act related spending, referring us to the US Commerce Department – which hasn’t yet responded to our request for comment. We'll let you know if it responds with something substantial.

It is yet to emerge if these layoffs are simply a consequence of widespread staff cuts across the federal government or illustrate President Trump’s animus towards the CHIPS Act, at least in its current form.

During an October 2024 appearance on the Joe Rogan Experience podcast, Trump called the bill "so bad." Other Republican leaders have also suggested repealing or altering the law.

Layoffs at NIST could conceivably be a tactic that slows the agency’s ability to hand out CHIPS Act funding, buying time for Congress to revisit the law before all currently allocated funds have been handed out.

The reports of layoffs at NIST come as the Trump yesterday suggested he's considering tariffs of 25 percent or more on imported semiconductors. TSMC, Samsung, and Intel are all building foundries in the US with assistance from CHIPS Act disbursements.

Just how altering the CHIPS Act, and reducing NIST's headcount, will help the Trump administration to achieve its stated goal of ensuring American technology supremacy is not clear. ®

Broadnote

Weird deal after weird deal keeps coming out of the rumor mill, and now we've heard some whispering that rival chip designer and seller Broadcom and rival chip manufacturer TSMC want to cleave Intel into two, with each taking the appropriate half.

This comes after speculation of Broadcom making some kind of play for Intel, and an earlier rumor that the White House was pushing for TSMC to take a controlling stakes in Intel's factories – though there was a counter-rumor President Trump wouldn't be happy with American fabs falling under foreign control.

Speaking of layoffs... The Trump administration reportedly had to rapidly reverse-course on axing hundreds of federal employees working on America's nuclear weapons programs. The White House's DOGE unit had earlier pushed for the staffing cut backs.

That's the same DOGE run by Elon Musk, who while claims there's no conflict of interest in what he's doing – selecting which federal workers should get the boot to ostensibly to save Uncle Sam some money – his team is indeed cutting officials who regulate and investigate the billionaire's array of companies.