Category: Technology

The Trump administration is weighing whether to divert at least $2 billion from the CHIPS and Science Act toward U.S. critical minerals projects, according to people familiar with the deliberations. The move would mark a significant redirection of funds originally earmarked for semiconductor research and factory construction, underscoring the White House’s push to reduce reliance on China for strategic resources.

The CHIPS Act, signed into law in 2022 under President Joe Biden, was designed to strengthen domestic semiconductor manufacturing and research through more than $50 billion in incentives. Since taking office in January, President Trump has repeatedly criticized the law as an overly generous “corporate giveaway” and has sought to reshape its provisions. Redirecting funds toward mining and mineral processing would be one of his most consequential adjustments yet.

Supporters of the potential shift argue that the proposal is consistent with the CHIPS Act’s core mission: ensuring secure and stable supply chains for chipmaking. Semiconductor fabrication requires a steady flow of critical materials such as gallium, germanium, and rare earth elements, areas where China dominates global production and processing.

“The administration is creatively trying to find ways to fund the critical minerals sector,” one source said, noting that any changes remain under discussion.

Commerce Secretary Howard Lutnick, a former Wall Street executive tapped by Trump earlier this year, would gain expanded authority over funding decisions. His office already manages CHIPS Act disbursements but would now oversee a broader portfolio of projects spanning mining, processing, and recycling. The move follows internal tensions after the Pentagon’s recent investment in rare earths producer MP Materials raised questions about Washington’s broader minerals strategy.

For U.S. mining and processing firms, the potential reallocation could provide a much-needed financial lifeline. Companies such as Albemarle, the world’s largest lithium producer, have warned that stalled U.S. refinery projects will be difficult to revive without direct government support. Similar challenges face smaller recycling and processing ventures, many of which struggle to compete with China’s state-backed operations.

It remains unclear whether the administration would deploy the $2 billion as grants, loans, or equity stakes. Lutnick has reportedly pushed to “get the money out the door” quickly, signaling urgency in expanding domestic mineral capacity. Additional funding reallocations may follow if the strategy is adopted.

The Biden administration previously considered using CHIPS Act dollars for critical minerals but dismissed the idea as uneconomical and environmentally complex. Critics of Trump’s approach may raise similar concerns, pointing to the permitting hurdles and potential environmental impacts of new mining operations. Others warn that shifting money away from semiconductor projects could weaken efforts to bring advanced chip manufacturing back to U.S. soil.

Still, Trump has moved aggressively to boost resource production. He has signed executive orders promoting deep-sea mining and met with major industry leaders, including Rio Tinto and BHP executives, to highlight his commitment. The administration’s broader strategy is also being coordinated with the Department of Energy, which last week proposed $1 billion in critical minerals spending tied to infrastructure legislation.

By elevating Lutnick’s role, the White House seeks to consolidate decision-making and avoid the fragmented approach seen earlier this summer. Administration officials say this shift will create clearer guidelines for government support across the minerals sector, though questions remain about how conflicts of interest will be managed.

The deliberations highlight the administration’s view that secure mineral supply chains are as vital as semiconductor fabs themselves. Whether Congress and industry stakeholders embrace the reallocation will determine how far the plan advances — and how quickly Washington can build resilience in two sectors that underpin the nation’s technological and economic future.