By Brian Swint
President Donald Trump reiterated his opposition to tax breaks for investing in semiconductor production in America. Chip stocks shrugged it off.
In his address to Congress Tuesday, Trump called the Chips Act, which has prompted Taiwan Semiconductor Manufacturing Co. and Intel to commit to building semiconductor plants in the U.S., a "horrible, horrible thing." He said Congress should repeal the law and to use the money saved to reduce debt.
Trump's opposition isn't new--he argues that giving hefty tax credits to invest in the U.S. is a waste of money because his strategy of imposing tariffs on chips would have the same effect. He brought up TSMC's recent pledge to spend $165 billion to build out facilities as evidence that he's right.
The idea behind the Chips Act, which has cost about $53 billion so far after being signed by President Joe Biden two years ago, is that the dispersion of the semiconductor supply chain through the U.S., Europe, and Asia presents a security risk--especially if tension between Taiwan and China should escalate. Trump is also in favor of onshoring more chip production, but he disagrees with the means.
The legislation has coincided with more U.S. investment, including in states that favor Trump's Republican Party. Intel has committed billions of dollars to build factories in Ohio, the home state of Vice President JD Vance.
"Trump called on Congress to 'get rid of' the Chips Act," said Raymond James analysts led by Ed Mills. "It is unlikely to be repealed and the 25% tax credit for capex is likely to remain."
Intel was up 0.6% in premarket trading Wednesday. Nvidia, the biggest U.S. chip company by market capitalization, added 1.6%, and TSMC American depositary receipts gained 2%. Broadcom shares rose 2%.
Write to Brian Swint at brian.swint@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 05, 2025 07:45 ET (12:45 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.