About 15 months ago, the US government earmarked funds to restore Pennsylvania’s historic heartland of computer chipmaking, trying to wrest high-tech manufacturing back from Asia.
Demand for chips to power the AI boom is racing higher, yet the federal money never arrived and Lehigh Valley is staring at another busted promise.
Economic Development Corporation, head, Don Cunningham told the Financial Times: “Everybody is scratching their heads… I think even the companies themselves are trying to figure it out,”
For those not in the know, the first mass-produced transistors were made in Allentown in 1951, and Western Electric and Bell Labs employed thousands there in the 1970s.
Their old base on Union Boulevard now houses a school, a driving test centre and an employment office.
Cunningham said: “Most people are surprised when they realise we’ve produced advanced technologies for the last 70 years.”
Plans to revive local chip manufacturing are stuck in limbo after Donald Trump upended US semiconductor policy over the past year.
Trump has attacked Biden-era subsidies and threatened individual companies to extract fresh commitments to US manufacturing. Across the country, advanced manufacturers are trying to plan multi-decade investments while policy lurches from day to day.
Bethlehem, mayor, Willie Reynolds said: “When the current administration came in, and contracts started getting frozen, and people started theorising about who ‘does President Trump like and who does President Trump not like’ it just created a lot of uncertainty.”
A commerce department official said it was working aggressively on outstanding projects under the Chips Act, aiming to get more for taxpayer money.
Successive US administrations have tried to shift more chipmaking onto American soil, and Biden had a clear electoral logic in placing Chips Act grants in a Pennsylvania swing district.
Trump has excoriated subsidies as handouts, then forced new deals with major recipients such as TSMC and Micron that demand much larger spending commitments in exchange for the cash.
With Intel, the administration went further, converting about $11bn in federal grants into a 10 per cent equity stake, which is one way to stop a company wriggling out of a plan.
Intel executives said the move was intended to stop the company from selling its manufacturing business as it cut costs, shuttering or pausing many US sites.
Trump’s intervention did not stop Chipzilla from closing its Lehigh Valley office, axing roughly 50 staff members and leaving the rest working remotely.
