America’s bold ambition to lead the global semiconductor race is facing unexpected headwinds, not from competitors, but from within. As US President Donald Trump floats fresh tariffs and threatens the very subsidies that sparked a manufacturing resurgence, tech executives and economic leaders are sounding alarms.Semiconductor giants, once hopeful about America’s CHIPS Act-powered comeback, are now grappling with a new layer of uncertainty.Sacramento’s Silicon surgeNowhere is the chip boom more visible than in Greater Sacramento. Intel’s presence since 1984 has long anchored the region, but recent years have seen a tech renaissance. Companies like AMD, Samsung, Micron, and Bosch have expanded operations, banking on federal support and California’s deep talent pool.German tech firm Bosch, for instance, is transforming its Roseville site into a next-gen chip hub for electric vehicles with a $1.9 billion investment, the largest in California in three decades. It’s expected to generate 1,700 new jobs.“During the pandemic, we saw how dangerous it was to rely on offshore chip manufacturing,” said Barry Broome, head of the Greater Sacramento Economic Council. “That moment made it abundantly clear, we need domestic production.”The Trump complicationBut just as ground is breaking and factories are rising, Trump’s proposed tariffs and attacks on the CHIPS Act threaten to reverse momentum.“You’re starting to see the impact,” said Mario Morales of IDC. “Samsung’s Texas fab is now delayed from 2024 to 2028. Uncertainty about funding and trade policy is making companies hesitate.”The Trump administration says it wants to probe foreign subsidies and overcapacity — but critics warn the timing is poor. With America’s share of global chip manufacturing already down to 10% (from 37% in 1990), any slowdown risks losing the AI race.CHIPS act vs tariff whiplashPassed in 2022 with bipartisan support, the CHIPS and Science Act aimed to reboot US chip production and secure military-grade tech independence. It’s working, a May 2024 report forecasts the fastest global capacity growth right here in the US.But if the CHIPS Act is undercut by new tariffs or policy reversals, progress could stall. “If tariffs are just leverage for better deals, we’ll rebound quickly,” Broome said. “If they’re long-term, capital investment will freeze.”From intel roots to AI futuresSacramento’s chip scene is also becoming an AI frontier. Dinakar Munagala, cofounder of AI chipmaker Blaize, says their domestically built chips are attracting attention from defense and security sectors.“We’re built here,” said Munagala. “That’s why there’s demand for our products, especially for high-security use cases like airports and border control.”Blaize board chair Lane Bess believes the region is poised to lead globally. “Talent from companies like Intel is now launching the next generation of chip startups here.”The global picture — and local stakesAnalysts like Alvin Nguyen warn that tariff confusion will ripple across supply chains. Even consumer products like the Nintendo Switch 2 have seen delays due to pricing uncertainty.In the long term, global diversification of chip foundries may ease reliance on Taiwan. But right now, the stakes in Sacramento, and the nation, are high.
