Two Texans in Congress defend CHIPS Act in the face of Trump’s criticism

Two Texas Republicans in Congress are defending the CHIPS Act, saying it benefits national security and creates jobs, and downplaying President Donald Trump’s recent request to get rid of the law.

The CHIPS and Science Act, signed into law in 2022 by then-President Joe Biden, gives funding to companies to manufacture semiconductors in the United States. This includes billions to help build and improve Texas factories producing materials for microchips.

The CHIPS Act – formally the Creating Helpful Incentives to Produce Semiconductors Act – was an effort by the federal government to encourage more semiconductor manufacturing in the United States. Semiconductors, which make up microchips, are found in nearly every electronic device including cars, cellphones and computers.

Rep. Michael McCaul, R-Austin, and Sen. John Cornyn, R-Texas, introduced the Chips for America Act, the bill that set up the programs funded by the CHIPS and Sciences Act, in 2020. The lawmakers are prominent Republican supporters of government programs that encourage semiconductor production.

The Chips for America Act was included in the fiscal year 2021 National Defense Authorization Act, which became law after Congress overrode a Trump veto for reasons unrelated to semiconductor production.

McCaul said the foundations for the CHIPS act go back to when members of Trump’s national security team – Secretary of State Mike Pompeo and Secretary of Commerce Wilbur Ross – approached him in 2020, while he headed the House China Task Force. They asked for help to start manufacturing “national security assets” inside the country and to pull supply chains out of Taiwan, McCaul said.

In his second term, Trump shocked many lawmakers during his March 4 joint address to Congress by asking House Speaker Mike Johnson, R-Louisiana, to “get rid of” the act.

“Your CHIPS Act is a horrible, horrible thing,” Trump said. “We give hundreds of billions of dollars, and it doesn’t mean a thing.”

The president implied that tariffs on semiconductors would be enough to encourage companies to move production to the United States.

But McCaul told The Texas Tribune that he thinks the president “went off script and was not well informed,” during the joint address.

“I think there's a little bit of cleanup behind the scenes,” McCaul said.

Trump might think it was a Biden administration idea, McCaul said, because Biden signed the CHIPS and Sciences Act into law. McCaul said Trump’s comment against the act “defies the history of CHIPS, which goes back to his administration and his national security team.”

The joint address wasn’t the first time Trump criticized the act. In January, Trump called CHIPS a “ridiculous program.”

Trump’s Commerce Secretary Howard Lutnick, during his January Senate confirmation hearing, called the act an “excellent downpayment,” to begin to bring semiconductor manufacturing to the United States, but added that the administration needs to study the law to “make sure that you get the benefit of the bargain.” Lutnick did not fully commit to continuing to fund CHIPS after being asked to by Democrats.

McCaul and Cornyn penned an op-ed days into the second Trump administration that called for Republicans to “reclaim rightful credit,” for the act and remove some grant recipient criteria.

Cornyn, one of 17 Senate Republicans to vote for the CHIPS Act, told The Texas Tribune Tuesday that he does not think getting rid of the act is likely.

“If something were to happen to the supply chain for advanced semiconductors, which is largely based in Asia, we would be in a depression,” Sen. John Cornyn said. “It would very negatively affect our national security interests.”

While the United States used to produce a significant portion of the world’s semiconductors, in recent years Asia – specifically Taiwan – has become the center of production. Taiwan, as of 2023, produces over 60% of semiconductors worldwide.

Sen. Ted Cruz, who voted against the CHIPS Act, was a leader on a successful bipartisan bill last year to take away some requirements for applicants – such as environmental reviews and permits.

Asked for comment, Cruz’s team did not send a statement about his current stances on the CHIPS Act in time for publication.

McCaul said the manufacturing jobs the law created and the national security aspect “plays right in line with America First,” a goal of Trump’s policies.

Multiple Texas facilities have been awarded funding from the CHIPS Act. This includes up to $4.7 billion for Samsung to build new facilities in Taylor and to improve one in Austin. Three new facilities in Sherman – up to $900 million for two Texas Instruments facilities and as much as $380 million for a GlobalWafers facility – were also granted funding under the act.

Other planned Texas projects have a more uncertain fate. In December, the federal government signed a $50 million nonbinding preliminary memorandum to modernize a X-Fab facility in the state. On Jan. 16, the federal government signed similar agreements with IntelliEPI for over $10 million to improve a facility and with Sumika to construct a Baytown factory for around $52 million.

The federal CHIPS Act was replicated by the Texas state government in 2023, setting aside almost $700 million to subsidize companies that make microchips.

Disclosure: Texas Instruments has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.