Update: Young ‘surprised’ by Trump’s CHIPS Act comment, open to changes but not scrapping law
Sen. Todd Young responds to president’s call to kill law meant to spur semiconductor production in the U.S., including SK hynix’s $3.8B plans in West Lafayette
U.S. Sen. Todd Young, one of the champions of the U.S. semiconductor push contained in the CHIPS and Science Act, said Thursday he’s been in touch with White House officials, saying he was willing to help with changes after President Donald Trump suggested that Congress kill the funding.
“Yeah, I was surprised by the comment,” Young told reporters Thursday, after Trump’s disparaging remarks about the CHIPS Act Tuesday during his joint address to Congress.
“I've been in touch with White House,” Young said. “And I think Secretary of Commerce (Howard) Lutnick brought more clarity to the situation yesterday, emphasizing the president understands we have to reshore semiconductor production, and I look forward to working with him on those efforts.”
Trump’s call to scrap the $52.7 billion CHIPS and Science Act, passed in 2022, and use the money elsewhere caused some confusion locally about how that might play out for SK hynix’s $3.87 billion plans to build a semiconductor packaging and research facility in West Lafayette. The South Korean company had been approved in summer 2024 to receive $458 million in federal CHIPS Act money for the facility at the Purdue Research Park. SK hynix also was approved for up to another $500 million in federal loans to support the 430,000-square-foot facility on 90 acres north of Kalberer Road in West Lafayette.
Young, an Indiana Republican, didn’t comment directly Thursday about specific projects already in the CHIPS Act pipeline, including SK hynix.
“My belief is that we will continue to optimize the implementation of the CHIPS Act, which is something I've always thought we should do, but that the program will still continue to exist and keep producing good results,” Young said. “Right now, right now, we're at over a half trillion
Asked if he knew what changes Trump wanted to make to the act, Young said he didn’t.
“But I can speculate,” Young said. “I can speculate that further improvement in terms of permitting reform will help expedite deployment of resources and ensure implementation happens as quickly as possible. Any mandates that require inclusion of particular categories of workers to participate in these projects will have to be reviewed and scrutinized – again, something that I emphasize needs to happen. The labor provisions may be open to conversation and improvement.”
Meanwhile, there were other indications of pushback on Trump, who called the CHIPS Act “a horrible, horrible thing.” The Hill reported doubts among Republicans who voted for the original legislations and continued to support the CHIPS Act’s goals that Trump’s idea could muster enough votes for a repeal.
“I think reconstituting domestic manufacturing of advanced semiconductors is a national security and economic imperative,” Sen. John Cornyn of Texas, who was one of 17 Senate Republicans who voted for the law, said in The Hill report.
Axios reported Wednesday evening, based on information from unnamed sources, that “Lutnick is looking for ways to target requirements the administration considers ‘woke,’ and to funnel any money from those costs back to the government or for more awards.” The report had Young in among the conversations about potential changes to the law.
As Thursday afternoon, U.S. Rep. Jim Baird, whose 4th District includes West Lafayette and who voted for the CHIPS Act in 2022, had not responded to questions about the situation.
Here’s more on the reaction in West Lafayette, published Wednesday in BiL.
TRUMP TRASHES CHIPS ACT FUNDING, QUESTIONS SWIRL ON $3.87B SK HYNIX PLANS IN WL
President Donald Trump’s suggestion Tuesday that Congress scrap the $52.7 billion CHIPS and Science Act and use the money elsewhere left questions swirling about how that might affect SK hynix’s $3.87 billion plans to build a facility in West Lafayette.
The South Korean company received word in August that it would get $458 million in federal CHIPS Act money as it makes plans to build a chip packaging and research facility at the Purdue Research Park.
The U.S. Commerce Department, under then President Joe Biden’s administration, also offered up to another $500 million in federal loans to support development of a 430,000-square-foot facility on 90 acres north of Kalberer Road in West Lafayette.
Trump has been critical of the CHIPS Act in the past. On Tuesday, during a joint address to the U.S. House and Senate, Trump encouraged Congress to rescind the measure, saying that the “America First” policies he had in mind wouldn’t need those sorts of incentives to land investments from foreign companies.
“The CHIPS Act is a horrible, horrible thing,” Trump said Tuesday during a speech that went more than an hour and 40 minutes. “We give hundreds of billions of dollars, and it doesn’t mean a thing. They take our money, and they don’t spend it.”
Turning to House Speaker Mike Johnson, Trump said: “You should get rid of the CHIPS Act, and whatever is left over, Mr. Speaker, you should use it to reduce the debt.”
U.S. Sen. Todd Young, an Indiana Republican, carried the CHIPS Act and has touted it as fundamental in spurring American semiconductor research, development and manufacturing as an effort to avoid supply-chain interruptions and the potential political whims of overseas manufacturers.
On Wednesday, a Young spokesperson shared this: “We’re seeking clarity on those comments as they are not consistent with the extensive conversations we’ve had with the administration about the many successes and future of the CHIPS program and how it helps with our shared goal of creating a robust domestic chips supply.”
SK Hynix officials said Wednesday evening they had no comment.
Purdue spokespeople referred questions to the company. U.S. Rep. Jim Baird, whose 4th District includes West Lafayette and who voted for the CHIPS Act in 2022, did not immediately respond to questions Wednesday.
West Lafayette Mayor Erin said the city would continue to plan for investment with SK hynix “and see the incredible potential for their investment in the United States and the state of Indiana.”
“There are myriad benefits to a community like ours, and we have faith in SK hynix’s intention to invest in West Lafayette,” Easter said Wednesday. “West Lafayette will continue to plan for growth in a way that takes care of our current residents, welcomes our new residents and eases the impacts of a rapidly changing community. We will remain adaptable, as all cities must, to handle the unique challenges we face and hope to find stability in the discussion of technological advancement and national security through the U.S. CHIPS and Science Act.”
Trump’s comments came the same day Reuters reported, attributing things to unnamed sources, that a third of the U.S. Commerce Department staff overseeing the CHIPS Act manufacturing subsidies were laid off this week. Reuters also reported in February that the White House was looking to renegotiate CHIPS Act awards and was considering delays to some upcoming semiconductor payments from the federal funds.
SK hynix and Purdue announced plans for the West Lafayette facility in April 2024, getting initial word about CHIPS Act funding in August. Since then, Purdue and West Lafayette have been making plans for potential companies that would supply SK hynix.
In an August 2024 interview, Young said SK hynix officials had indicated during negotiations “that they planned to make this investment in Hoosiers and in this project regardless.”
“That tells me that these monies can be helpful and allowing SK hynix to realize a larger project, one bigger in scope and that would probably employ more people as a byproduct than what they would have envisioned,” Young told Based in Lafayette.
The SK hynix facility is expected to mass produce high-bandwidth memory that works with advanced graphic-processor units to get the data-processing speed for generative AI applications, with the ability to process up to 1.18 terabytes of data a second, according to company and federal information. The facility also will include an R&D component to develop future generations of chips, according to Purdue.
SK hynix was expected to break ground in 2025 on a project that is could create an estimated 800 jobs.
In related moves …
ZONING REQUESTS PENDING: Purdue Research Foundation is looking to rezone 134 acres north of Kalberer Road, between Salisbury Street and Yeager Road. That would be across from land set aside for SK hynix. Both requests will go to the Area Plan Commission March 19.
The first is to rezone 13.1 acres along Kalberer, on either side of West Lafayette Fire Station No. 3 and stretching from Salisbury to Yeager, from a single-family zoning to neighborhood business.
The second is for 121.5 acres just north of the other tract, taking the land from residential to heavy industrial.
Jeremy Slater, PRF vice president of capital projects and facilities, said nothing is set to go on either property, yet.
“We’re holistically looking at the research park,” Slater said. “There’s some potential for growth opportunities and some suppliers … We just want to be in position to have all the lands ready and in a similar fashion to the rest of the research park.”
The request to rezone the larger parcel for industrial use comes with a list of suggested restrictions Slater said PRF worked through with city officials. Among those: Heavy construction contractors, recycling centers, asphalt plants, confined feeing operations, truck stops, fuel dealers, laundry services, impound lots, industrial truck services and motion pictures.
The Area Plan Commission will meet at 6 p.m. Wednesday, March 19, at the Tippecanoe County Office Building, 20 N. Third St. in Lafayette
STILL IN THE WORKS: The land up for rezoning plays into other SK hynix-related moves waiting to wrap up.
The West Lafayette Redevelopment Commission has been waiting on finalized negotiations involving the Indiana Economic Development Commission on a measure that would pull the 90-acre parcel reserved for SK hynix from the city’s KCB Tax Increment Financing District. The move would clear the way for the IEDC’s offer of hundreds of millions of dollars in Innovation Development District tax rebates to SK hynix.
That move also would mean funneling tax revenues from that acreage – including from property, sales and income taxes – away from local control and into the hands of the IEDC, except for an amount settled on with the city. As of the West Lafayette Redevelopment Commission’s Feb. 19 meeting, that agreement hadn’t been reached after months of negotiations. Earlier this year, Larry Oates, president of the West Lafayette Redevelopment Commission, said the delay in the final vote was meant to protect the city and Tippecanoe School Corp. until a deal is finalized that would make sure costs are covered related to roads, wastewater treatment and other infrastructure tied to the SK hynix facility.
Typically, the redevelopment commission uses proceeds from development – and the increased property tax revenues that follow – in its assorted TIF districts to budget and pay any number of capital expenses, including streets, trails, utility projects, police cars, firefighting equipment, park improvements and more.
An Innovation Development District works in a similar fashion, capturing the incremental increase in taxes when compared to the bill now for the empty ground. According to the three-year-old state law, the difference is that Innovation Development Districts reap more than property taxes, branching into sales tax and state and local income taxes, as well. Plus, the IEDC would get to control how that tax revenue from SK hynix would be used.
The IEDC and SK hynix signed an Innovation Development District fund grant agreement in June 2024. According to the document, available on the IEDC’s transparency portal, the agreement runs from Dec. 12, 2023, to Dec. 31, 2055. It offers a maximum grant amount of $712,183,430. That’s based on a return of 45% of the state incremental tax revenues and 52.8% of the local incremental tax revenues over 30 years, starting in 2026, according to the agreement.
In projects worth more than $2 billion, the IEDC has authority to establish an Innovation Development District, guaranteeing local governments at least 12% of that IDD revenue. The hitch in this case is that state law doesn’t allow the IEDC to take control if a local government already has the targeted property in a TIF district.
The proposal waiting for the West Lafayette Redevelopment Commission vote also would carve out other portions of the KCB Tax Increment Finance district to create what was dubbed the Research Advancement District – which includes the chunk of land up for rezoning north of Kalberer Road.
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Currently, no one - not our mayor, not the Purdue president, not our senator, not the Secretary of Commerce - can say if this thing will even happen now that Trump has called the Chips Act a "horrible" thing. Even the recent quote from the SK Hynix spokesperson is not reassuring. So what's going to happen to WL if this parcel is rezoned to I3 and SK Hynix doesn't go through? That land will be wide open to anyone that comes along with money to develop. This is why the restriction list is so important: How about a concrete plant? How about another Staley's? How about a pharmaceutical plant? How about a gravel pit? How about a junk yard? I suggest our city leaders think long and hard about more than just supporting SK Hynix and make sure they place a broad restriction on the types of industrial operations allowed on that land.
Unfortunately Todd Young does not yet understand what is happening. Maybe he should look around at all the agencies this administration is gutting and see the big picture.