Believe it or not, but US President Donald Trump shared some similar goals with his predecessor, Joe Biden. Both US Presidents wanted to encourage more manufacturing of semiconductors in the US, which ultimately led to the CHIPS Act. This is a grant for companies to incentivize them to produce more semiconductors stateside. However, it seems that Trump is now considering using funding for the CHIPS Act to acquire critical minerals.
Trump wants CHIPS Act funding for minerals
According to an exclusive report from Reuters, the publication’s sources have told them that Trump is currently weighing the option of using funding for the CHIPS Act to acquire critical minerals.
In case you did not know, but manufacturing semiconductors involves the use of several types of minerals. This includes germanium, gallium, lithium, and indium, just to name a few. Many of these minerals are mined around the world, however, mining is just one side of the story. To make them actually usable, they need to be processed and refined.
Think of it like food. You have the raw ingredients to make a burger, but if you don’t know how to actually process all of it, it’s not very useful. This is where China comes in. China processes and refines the bulk of the world’s minerals, and this is something the Trump administration isn’t too happy about.
It is also why they are considering using $2 billion from the CHIPS Act for mining-related projects. By doing so, it could allow US-based companies and other companies around the world, to be less reliant on China.
Trump’s push for US self-reliance
If this report is accurate, it is in line with what the Trump administration has been doing. Just a few months ago, Trump announced sweeping global tariffs for goods imported into the US. China and India have been hit the hardest.
The administration also announced that it would impose a 100% tariff on imported semicondcutors. However, there is a loophole. If companies make their chips in the US, or commit to investing in more chip-making facilities stateside, they would be exempt. Trump has also toyed with the idea of using grants from the CHIPS Act to gain a stake in companies.
It was recently suggested that this could include companies that have already received grants (or part of it), such as Intel, Samsung, TSMC, and Micron.
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