The CHIPS Act, which was supposed to provide subsidies to US-based chip manufacturers and create more jobs for Americans, is allegedly the latest victim of the Department of Government Efficiency (DOGE) and has laid off 80 percent of its staff.
According to the Korean outlet Chosun (translated source), the Commerce Department's Chip Program Office (CPO), which oversees subsidies distribution, had laid off 120 of its approximately 150 employees. Some employees are also advised to resign. The Korean website added that Dan Kim, the former vice president of SK Hynix's Washington DC office who joined the CHIPS Act initiative as chief economist, also resigned last week.
The CHIP Act was an initiative by the US government to encourage semiconductor production and research and development (R&D) in the United States. The initiative, begun in 2022 under the Biden administration, had a total budget of $280 billion and aimed at building 16 new semiconductor manufacturing facilities in the US and creating over 115,000 manufacturing and construction jobs.
Intel, TSMC, Samsung, and Micron were entitled to receive the most significant chunk of funds from the CHIPS Act. However, with the sudden dismantling of the initiative, their future program and plans for building more semiconductor firms in the US will likely go down the drain.
According to Chosun, Korean companies are closely monitoring the situation. Samsung, which is now building a semiconductor production facility in Texas, was supposed to receive $6.4 billion in funding, and SK Hynix was also supposed to get $458 million.
Dismantling the CHIPS Act under the Trump administration is unsurprising as the US President has already blamed the entire program and called it a "bad" deal.
"That chip deal is so bad, we put up billions of dollars for rich companies to come and borrow the money and build chip companies here, and they're not going to give us the good companies anyway," Trump said on the Joe Rogan podcast.
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