Chips Act funding could be at risk as Trump cuts federal workers

The Chips Program Office, which oversees the implementation of the Biden administration’s CHIPS and Science Act, is set to lose two-fifths of its workforce, Bloomberg reported, citing unidentified people. About 20 employees have left after accepting deferred resignations, according to Bloomberg, and about 40 probationary workers are bracing for layoffs on Monday.

The Department of Commerce did not immediately respond to a request for comment from Quartz.

The terminations won’t have a big effect on employees negotiating contracts with companies receiving funding, one person told Bloomberg. These employees are responsible for tracking progress on contractual benchmarks. Leaders in the Chips Program Office met Commerce Secretary Howard Lutnick to discourage him from laying off those employees, Bloomberg reported.

Other Chips Act funding projects may be at risk due to federal cuts, including $500 million in funding for smaller companies involved in the semiconductor supply chain.

Lutnick has asked the office’s employees how it’s making funding decisions, and how the government could get money back that has been awarded, according to Bloomberg. He’s also interested in limiting how companies who have received Chips Act funding can conduct business in China, the news service said.

Employees are looking at ways to amend applications for funding and contract language that could meet the Trump administration’s demands, Bloomberg said.

Meanwhile, Taiwan Semiconductor Manufacturing Co. (TSM) (TSMC $TSM), a recipient of Chips Act funding, announced it’s planning to invest at least $100 billion to build out chip plants in the U.S. over the next four years.

Most of the investment will be focused in Arizona where TSMC is already building a chipmaking hub, President Donald Trump told reporters on Monday. He added that the plan includes building five cutting-edge chip fabrication facilities in Arizona that will create thousands of jobs.