CHIPS Act under fire: Which tech stocks could land in the crosshairs?

As part of the Trump administration’s extensive efforts to cut federal spending, 500 or so National Institute of Standards and Technology staffers are expected to be laid off.

The move directly impacts the team conducting research and development for semiconductor projects funded by the CHIPS and Science Act.

Analysts see the move as an impediment to stocks in the semiconductor sector, if not the AI industry in general—with opinions divided on which stocks might be negatively impacted

The good, bad, and ugly

A combination of decreased funding for U.S. semiconductor production and increased tariffs on imported chips could mean the worst of both worlds for chipmakers.

Apart from the tariff-induced cost risk, there are many tech companies that benefit, either directly or indirectly, from increased federal funding under the CHIPS.

For example, Intel Corp. (INTC) and Micron Technology Inc. (MU) have received a significant amount of funding and each is in the process of constructing new domestic facilities.

There are also Applied Materials Inc. (AMAT), LAM Research Corp. (LRCX), and other companies that make related equipment would also likely be impacted by CHIPS Act changes.

Bank of America analyst Wamsi Mohan points to Apple (AAPL) as another example of a possible casualty of Trump administration policies.

Without a tariff exemption, the Big Tech giant would face higher costs — and after Wednesday’s iPhone 16e launch came with a price tag higher than expectations, Apple buyers may become more cost-sensitive.

Companies with robust global supply chains or contracts not tied to the CHIPS Act could withstand or even benefit from proposed policy shifts, but a thick cloud of uncertainty remains overhead for now.

"We have to figure out exactly if there are going to be any adjustments"

Some analysts see the uncertainty surrounding the CHIPS Act and other White House policies as a reason to avoid certain tech stocks altogether.

However, Micron executive April Arnzen asserted this week that the company is confident U.S. investments in semiconductor research and development will continue under the Trump administration.

“The CHIPS and Science Act was a bipartisan piece of legislation,” Arnzen said. “There is strong support for growing semiconductors and the semiconductor ecosystem in the U.S. I do not see that changing at all.”

While Micron insists it is not concerned that CHIPS Act changes will derail its plans for a chip-making facility in New York, Arnzen did offer one caveat:

“Of course we have to figure out exactly if there are going to be any adjustments, what does that mean to us. Like every other company, we’ll go through that same process.”