Why Donald Trump's comments on Joe Rogan's show are sending chills down Arizonan spines

Trump's rhetoric, while triumphant to his supporters, may contain a worrying message for one sector.

PUBLISHED OCT 29, 2024

Donald Trump’s comments have come in for heavy criticism.

Phoenix, Arizona: A recent 12 News report has asked the question on many Arizonans' lips after former president Donald Trump's three-hour sit-down with Joe Rogan: Will Trump sound the death knell for Arizona's semiconductor boom?

Former President Donald Trump voiced strong criticism of the bipartisan CHIPS Act, claiming it was a costly mistake. Trump told Rogan that instead of providing billions of dollars in incentives to companies to build semiconductor facilities in the US, his administration would have employed a series of tariffs on imported chips from Asia to achieve the same goal, with no government subsidies required.

While a majority of chips are still made in South Korea, Taiwan and China, there is shift to other markets, primarily the US.

“You didn’t have to put up 10 cents,” Trump asserted, stating that tariffs alone would have compelled companies to establish manufacturing plants domestically.

“That chip deal is so bad,” Trump said. “We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here. They’re not going to give us the good companies anyway.”

Fab 21 under construction in Phoenix, Arizona in November 2023.

What is the CHIPS act?

The CHIPS Act, formally known as the 'CHIPS and Science Act', is a federal law enacted in August 2022 aimed at boosting domestic semiconductor manufacturing, research, and development. The acronym 'CHIPS' stands for 'Creating Helpful Incentives to Produce Semiconductors'. The act allocates around $52 billion in funding for the semiconductor industry. Of this, approximately $39 billion is dedicated to subsidies and grants to encourage companies to build and expand chip manufacturing facilities within the US.

An additional $13 billion is allocated to support R&D efforts in semiconductor technology, including funds for the National Semiconductor Technology Center and manufacturing institutes.

It includes a 25% investment tax credit for companies investing in semiconductor manufacturing, further incentivizing domestic production.

Without a doubt the industry of the future.

The CHIPS Act, has already led to substantial investments and job creation in Arizona, where TSMC is investing $65 billion in a semiconductor facility expected to bring 6,000 jobs to the region. Arizona is now leading the US pack in semiconductor development.

Trump’s comments have come in for heavy criticism from economists who argue that steep tariffs could increase consumer prices on electronics and hurt the US economy.

Taiwan's semiconductor industry is a cornerstone of the global technology ecosystem, driven by leading companies like TSMC, UMC, and MediaTek.

Democratic Senator Mark Kelly, a key supporter of the CHIPS Act, reacted to Trump’s remarks, suggesting that Trump’s criticism was rooted in personal frustration with the success of the initiative. “I think he’s jealous because we succeeded in a place where he failed on job creation,” Kelly said, surrounded by industry stakeholders who have directly benefited from the growth of the semiconductor industry in Arizona.

Former Arizona Governor Doug Ducey, a Republican, also supported the CHIPS Act's role in attracting TSMC to the state. In his final address as governor, Ducey praised the legislation for its role in establishing Arizona as a critical hub for semiconductor manufacturing.