Taiwan Semiconductor, Intel Navigate Shift As Trump Looks To Slash Chips Act Workforce By 40%

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The U.S. Chips Program Office faces a 40% staff cut as Trump's strategy shifts from Biden's semiconductor investment approach.
Around 60 employees exit the Chips Office as Trump favors tariffs over Biden’s $39B manufacturing grants for chipmakers.
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The U.S. Chips Program Office will lose close to forty percent of its staff, marking a divergence in President Donald Trump’s strategy from that of Joe Biden.

The reduction includes around 20 employees who accepted a voluntary deferred resignation and left the U.S. government office last week, Bloomberg reported, citing unnamed sources familiar with the matter. Reportedly, the Trump administration will terminate the office of another 40 who are considered probationary on Monday.

Also Read: Taiwan Semiconductor Weighs $100 Billion US Investment As Chip War Heats Up

The 2022 program the Biden administration inked includes $39 billion in manufacturing grants to companies like Taiwan Semiconductor Manufacturing Co TSM and Intel Corp INTC, plus $11 billion for research and development. It has prompted well over $400 billion in promised private investment.

Commerce Secretary Howard Lutnick suggested to Bloomberg that Trump tariffs have an edge over the erstwhile Chips Act.

He lauded how Trump convinced Taiwan Semiconductor to boost its U.S. investment by $100 billion to avoid tariffs instead of the erstwhile $65 billion Arizona fab investment in return for a 10% subsidy.

The Biden administration built an office of about 140 people to oversee the Chips Act manufacturing spending, in addition to staff responsible for R&D funding.

The semiconductor supply chain disruption due to the 2020 pandemic and alleged national security threats from countries like China prompted countries like the U.S., Europe, and Japan to consolidate the domestic semiconductor base.

Therefore, they forged deals with the chipmakers to construct fabs in their countries to develop advanced semiconductor technology, notably artificial intelligence technology, to unlock value.

U.S. Big Tech giants have downsized by a couple of thousands, citing a pandemic-induced slowdown, an efficiency drive, and other factors.

In 2022, Amazon.Com Inc AMZN let go of its workforce, affecting 27,000 positions. Microsoft Corp MSFT fired 10,000 employees in 2023, losing 4%-5% of its workforce. In 2023, Alphabet Inc GOOG GOOGL Google slashed 12,000 jobs, affecting ~6% of its workforce. Since November 2022, Meta Platforms Inc META laid off 21,000 employees or 25% of its workforce.

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