The Trump administration has floated plans to reallocate $2 billion in CHIPS and Science Act funding to support critical mineral projects.

Citing two sources familiar with the matter, Reuters reported that the funds being considered have already been allocated by Congress for projects supported by the Act, but noted that this approach would avoid the administration having to put forward fresh funding requests in order to support the sector and reduce the country’s reliance on China.

A number of critical minerals used for manufacturing in the semiconductor, electronics, and defense industries originate from China, but have been subject to export restrictions in recent years as a result of the escalating trade war between China and the US.

Gallium and germanium are two such minerals critical to chip manufacturing – gallium is needed for the production of gallium nitride (GaN), a material that can handle higher amounts of power than silicon and can therefore be used to make more efficient and durable chips, while germanium is used to manufacture high-speed transistors and fiber-optic cables.

However, according to the US Geological Survey (USGS), China currently produces 98 percent of the world’s supply of gallium and 60 percent of germanium.

In August 2024, it was reported that Chinese export controls on semiconductor materials had already caused supply chain issues for Western manufacturers, with prices of germanium and gallium almost doubling in Europe during a 12-month period.

Reuters said it was not immediately clear if the Trump administration would use the funds to provide grants to minerals companies or look to take an equity stake in them, similar to an idea it is currently floating with semiconductor manufacturing companies.

Since beginning his second term in office, Trump has signed executive orders to increase deep-sea and domestic mining efforts. In July 2025, the Pentagon signed a multi-billion-dollar deal that saw it become the biggest shareholder in rare earths producer, MP Materials.

MP Materials operates the only US rare earths mine and is working to increase domestic processing and magnet production. Earlier this year, Apple signed a $500 million deal with the company that will see the mining company provide the tech giant with rare earth magnets, starting in 2027.

Trump administration still eyeing Intel stake, has no plans for similar agreement with TSMC

Reports that the Trump administration is considering reallocating CHIPS Act funds comes in the same week that Commerce Secretary Howard Lutnick said that the government wanted to take equity stakes in companies set to be in receipt of grants under the Act.

However, while it’s been widely reported that the administration is seeking a 10 percent stake in troubled chipmaker Intel, a White House official told Reuters that such an arrangement was not being considered for larger companies that had already agreed to increase their investments in the US, such as Micron and TSMC.

TSMC is expected to spent $165bn to support its chips manufacturing efforts in the US, while in June, Micron announced it was planning to invest $200 billion to boost chip manufacturing in the country, a $30bn increase on the company’s previously announced investment plans.

President Trump has long been critical of the CHIPS Act, arguing that the government should levy tariffs on the semiconductor industry instead of handing out grants and loans to chip companies. However, despite saying multiple times that tariffs on foreign-made chips would be imposed imminently, Trump has yet to announce any specific levies on semiconductors.

He last made such a claim on August 15, saying: "I'll be setting tariffs next week and the week after on steel and on, I would say, chips.” The week prior, he reiterated comments from earlier in the year, stating he plans to impose an 'approximately' 100 percent tariff "on all chips and semiconductors coming into the United States."

Trump said companies that are building, or planning to build, in the country will be exempt but the level of investment required to be exempt from the tariffs was not disclosed.