The Trump administration is reportedly renegotiating agreements forged under the Biden-era CHIPS Act, aiming to extract greater investment from semiconductor companies without increasing federal spending. This revelation comes from Secretary of Commerce Howard Lutnick, who testified before the Senate Appropriations Committee on Wednesday.

Lutnick highlighted a revised deal with Taiwan Semiconductor Manufacturing Company (TSMC) as a prime example. TSMC originally received $6.6 billion in direct federal funding under the CHIPS Act in return for a commitment to invest $65 billion in three advanced fabrication plants in Arizona. However, TSMC later announced a significant expansion of its investment, adding a further $100 billion without requesting any additional subsidies.

“We’re getting more value for the same dollars,” Lutnick stated in response to Senator Jeff Merkley (D-Ore.), who questioned whether the Commerce Department was deliberately delaying the disbursement of already-approved CHIPS Act funds. This suggests a strategy to leverage the initial agreements to secure considerably more investment from the semiconductor industry, bolstering domestic manufacturing and economic growth.

The details surrounding these renegotiations and their potential impact on the CHIPS Act’s overall effectiveness remain to be seen. However, the reported success in securing a significantly larger investment from TSMC without additional government spending offers a compelling narrative for the Trump administration’s approach to economic development.