The Peterson Institute for International Economics published an opinion piece this week arguing that repealing the CHIPS and Science Act would damage US semiconductor investment. The piece, headlined "The CHIPS Act already puts America first. Scrapping it would poison the well for US investment," was authored by Peterson Institute analysts.

The CHIPS and Science Act, signed into law in August 2022, allocated $52.7 billion for US semiconductor manufacturing, research and workforce development. The Department of Commerce has since announced preliminary awards and final agreements with companies including Intel, TSMC, Samsung Foundry, Micron Technology and GlobalFoundries for fab construction in Arizona, Ohio, Texas, New York and Idaho.

What is the Peterson Institute's central argument?

The op-ed frames the CHIPS Act as a domestic subsidy program rather than a foreign aid vehicle. It argues the statute's tax credits and grant programs primarily benefit companies that build fabrication facilities on US soil. The authors contend that reversing course would signal policy instability to capital markets. Investors typically require multi-decade commitments to recover the cost of a leading-edge fab, which now exceeds $20 billion for sub-3nm production lines.

How much US capacity has the law already triggered?

Commerce Department data show more than $200 billion in private semiconductor investment commitments announced since the CHIPS Act passed. TSMC has broken ground on three Arizona fabs covering the 4nm, 3nm and 2nm nodes. Intel has two Ohio sites under construction for the 18A and 14A process generations. Samsung is expanding its Taylor, Texas facility for 4nm and 2nm production. Micron has started work on a Boise, Idaho research center tied to a planned $100 billion New York megafab for DRAM.

What would repeal mean for fab economics?

The law offers a 25 percent Advanced Manufacturing Investment Credit on qualifying semiconductor capital expenditures. Removing that credit would raise the after-tax cost of every new US tool installation. The Peterson Institute authors argue that international competitors, particularly the European Chips Act and Japanese Rapidus subsidies, would continue regardless of US policy. A repeal would therefore tilt the playing field toward foreign jurisdictions without restoring fiscal restraint.

How does the op-ed address geopolitical risk?

The piece notes that Taiwan produces roughly 60 percent of the world's semiconductors and nearly 90 percent of leading-edge logic chips. Concentrated fabrication on a single island remains a documented supply chain vulnerability for US defense and consumer electronics buyers. Domestic capacity expansion reduces that exposure over a five-to-ten-year horizon. The Peterson Institute argues that policy reversal would prolong dependency on a narrow geographic base.

Who else has weighed in?

The Semiconductor Industry Association has consistently defended the CHIPS Act's framework since passage. SIA president John Neuffer has testified before Congress that federal incentives accelerated project timelines by several years. Some congressional Republicans have proposed narrower versions of the program, focusing on advanced packaging and trailing-edge nodes used in automotive and defense applications. The Peterson Institute op-ed enters a debate that now spans budget reconciliation hearings and trade policy reviews.

The Commerce Department has not yet commented on the Peterson Institute analysis. Future CHIPS Act milestone awards and the allocation of remaining $11 billion in incentive funding will test the durability of the bipartisan framework through the next budget cycle.