Amid President Donald Trump's bombshell remarks about abolishing the 'CHIPS Act' and the refusal to provide subsidies promised to corporations, Republican lawmakers in Texas, where Samsung Electronics' semiconductor plant is being built, are raising their voices in support of subsidies for corporations.
Former House Foreign Affairs Committee Chairman Michael McCaul noted on the Texas Tribune on Dec. 12 (local time) that while former President Biden signed the semiconductor law, its origins date back to Trump's first administration and his national security team, claiming that the semiconductor law contributes to U.S. national security and creates jobs. McCaul represents Austin, Texas, where Samsung Electronics' first foundry in the U.S. is located.
McCaul assessed Trump's declaration to abolish the semiconductor law, stating that "the president made an unprepared statement impulsively and did not have sufficient information." He added, "There will be cleanup work behind the scenes to manage the situation."
Earlier, President Trump criticized the semiconductor law as "terrible" during a joint address to the U.S. Congress on 4th, stating, "We give out hundreds of billions of dollars (in subsidies), but it means nothing, and we need to eliminate the semiconductor law and everything else." Trump maintains that by imposing high tariffs, investments can be attracted without giving subsidies to corporations, arguing that the semiconductor law is unnecessary.
In this regard, McCaul analyzed that Trump may mistakenly believe the semiconductor law is an idea of the previous Biden administration. The semiconductor law, enacted in August 2022, is a key legislative achievement of the Biden administration, providing a total of $52.7 billion (approximately 76.6 trillion won) to semiconductor companies investing in the U.S. However, the semiconductor law was originally established based on the Defense Authorization Act (NDAA) for Fiscal Year 2021, which was enacted at the end of Trump's first administration. NDAA 2021 includes provisions for a technological war with China and protecting the semiconductor industry in the U.S.
According to McCaul, during the Trump administration, former Secretary of State Mike Pompeo and former Secretary of Commerce Wilbur Ross discussed the need to transfer the semiconductor supply chain from Taiwan to the U.S., laying the groundwork for the semiconductor law. McCaul, who was the chairman of the House China Task Force, stated that he played a role in supporting the production of advanced semiconductors in the U.S. This indicates that the origins of the semiconductor law began with Republicans. Subsequently, the semiconductor law was enacted with bipartisan agreement aimed at restoring the competitiveness of the U.S. semiconductor industry.
Senator John Cornyn of Texas also emphasized the importance of the semiconductor law, predicting a low likelihood of the bill being abolished. He stated, "Given that the advanced semiconductor supply chain is concentrated in Asia, if something goes wrong, the U.S. economy will face a crisis at the level of the Great Depression," adding that it would have a very negative impact on national security. These lawmakers argued that the semiconductor law also aligns with Trump's 'America First' policy in terms of creating manufacturing jobs. In fact, since the implementation of the semiconductor law, the amount invested by global corporations in the U.S. semiconductor industry has reached approximately $166 billion (about 231 trillion won), indicating that this law is contributing to job creation within the U.S.
Currently, Samsung Electronics is building the largest semiconductor factory in Texas. Samsung Electronics announced a plan to construct a state-of-the-art foundry plant in Taylor City for $17 billion (approximately 24.7 trillion won) in 2021, and subsequently expanded the investment scale following the passage of the semiconductor law the following year. To date, the investment amount announced by Samsung Electronics exceeds $37 billion (approximately 53.8 trillion won), and it has contracted to receive up to $4.745 billion (approximately 6.9 trillion won) in subsidies from the U.S. government.
In addition to Samsung Electronics, U.S. semiconductor corporation Texas Instruments and Taiwanese wafer manufacturer GlobalWafers are also constructing factories in Texas, each agreeing to receive $900 million (approximately 1.3 trillion won) and $338 million (approximately 500 billion won) in subsidies. The Texas State Government allocated approximately $700 million (about 1 trillion won) to support semiconductor manufacturing corporations in 2023, separate from federal government assistance.