President Trump's Unprecedented Intervention in the Semiconductor Industry

In a shocking display of presidential power, President Trump has asserted himself as the decisive figure in the global semiconductor industry. With a series of blunt interventions, Mr. Trump has threatened to take away government grants, restricted billions of dollars in sales, and demanded investments from chipmakers. The industry, valued at $600 billion, has long been a crucial component of the technology sector, and Mr. Trump's actions have sent shockwaves throughout the sector.

Key Takeaways:

• Mr. Trump has become the leading decision maker for the semiconductor industry, with a series of unprecedented interventions that have left companies scrambling to adapt.
• The industry's careful planning has been replaced by a game of insider politics, with companies competing for presidential favor and facing sudden threats and demands from Mr. Trump.
• The legality of Mr. Trump's deals is unclear, with no precedent for collecting fees in exchange for granting export licenses, as the administration plans to do with Nvidia and Advanced Micro Devices.
• Industry leaders, such as Jensen Huang, the CEO of Nvidia, and Tim Cook, the CEO of Apple, have traveled to Washington to plead their cases directly with Mr. Trump, citing the unpredictable nature of his actions.
• Mr. Trump's demands on companies are not limited to the semiconductor industry, with threats to withhold grants, impose tariffs, and restrict sales to China.
• The industry's global importance and the potential for a Chinese invasion of Taiwan have raised national security concerns, with Mr. Trump pressing companies to start making more chips in the United States.
• Companies such as Nvidia and Micron Technology have responded to Mr. Trump's pressure by announcing significant investments in U.S. manufacturing, with Nvidia investing $150 billion and Micron Technology increasing its U.S. investments by $150 billion.

Statistics:

• The semiconductor industry is valued at $600 billion and is critical to the global economy.
• Nvidia, led by Jensen Huang, has become one of the world's most valuable companies, with a market value of over $4.4 trillion.
• The Trump administration's CHIPS Act provides $52 billion in subsidies and tax credits for manufacturing chips in the United States.
• The administration's tariffs on semiconductors could have a significant impact on global trade, with Mr. Trump announcing a 100 percent tariff on foreign semiconductors.
• Nvidia suffered a $5 billion loss due to Mr. Trump's restriction on sales of its AI chips to China.

Sources:

• Anne E. Harrison, professor of economics at the University of California, Berkeley and former dean of the Haas School of Business: ''This isn't rational industrial policy. This is intervention into who runs companies and threatening businesses with penalties if they don't do what Trump says.''
• Jimmy Goodrich, senior adviser at the RAND Corporation and former policy leader at the Semiconductor Industry Association: ''The whole thing is a roller-coaster ride. It's up and down and in who knows what direction because Trump is dealing with these issues as they come.''
• Kush Desai, White House spokesman: ''Americans cannot afford another autopen administration lackadaisically dropping the ball in this space.''
• Chris Miller, history professor at Tufts University and author of the book ''Chip War'': ''C.E.O.s have decided the best strategy is to form, to the degree possible, a direct relationship with the president.''
• Quote from President Trump: ''I think he's coming to see me again about that.''