The US government is considering redirecting $2 billion from the Biden-era CHIPS Act to mining projects for minerals critical to semiconductors, including gallium and germanium, according to Reuters.
The potential reallocation follows the administration’s recent pledge to use CHIPS Act funding for a 10% equity stake in Intel. Sources familiar with the Trump administration’s discussions told Reuters the move would still fall within the spirit of the act’s original intent.
CHIPS Act could stretch to include minerals
On Aug. 18, news broke that the Trump administration may convert part or all of the $10.9 billion allocated to Intel under the CHIPS Act into equity. The act was intended to boost domestic chip research and production in an effort to onshore more semiconductor work as opposed to importing chips from Asia.
President Donald Trump has criticized the law, calling it “a horrible, horrible thing” and has spoken out against the practice of awarding federal grants to large corporations.
The Biden administration had previously considered extending CHIPS Act funding to rare earth suppliers, a former US official told Reuters; however, according to this source, the government determined such a plan would be economically impractical and would require numerous environmental exemptions. Instead, the Department of Energy has continued coordinating with rare earths suppliers.
The proposed change could also expand the influence of US Commerce Secretary Howard Lutnick in the minerals sector, according to Reuters’ sources.
What's hot at TechRepublic
- Blackpoint Cyber vs. Arctic Wolf: Which MDR Solution is Right for You?
- Why AWS Sellers Choose Deepgram Over Other Voice AI Tools
- SS&C Intralinks DealCentre AI vs. Datasite: Which platform is built for the future of dealmaking?
- SS&C Intralinks FundCentre AI vs. Juniper Square: Which platform better supports modern private markets fund managers?
- Verito vs. Rightworks: Which IT Provider Is Best for Your Firm?
US government targets an increased link with mining and rare earths projects
Last month, the government acquired a stake in the rare earth metals company MP Materials, a move highlighting the increasing overlap between public and private sector involvement in critical mining projects.
Since taking office, Trump has sought to advance deep-sea mining and domestic rare earth initiatives. His administration drafted an executive order that called for a reexamining existing regulations on mining key materials such as nickel, cobalt, copper, manganese, and titanium.
Both the Biden and Trump administrations have emphasized semiconductor development as a way to reduce dependence on China, which dominates production of many vital minerals.
The US government under Trump has been practicing the art of the deal with AMD and Nvidia, taking 15% of revenue from sales to China.