June and July were busy months at CHIPS Communities United, as we tracked and tackled the impacts of the AI boom on local communities, workers, and the environment.
If you’re just joining us, thanks for being part of this community. Read on for a news digest, and please follow us on social media!
There are lots of opportunities to get involved with CCU, including our monthly Local Action Network, bringing together people around the country who are working to make sure chip factories benefit their communities, and Forever Ends Here, a national campaign to stop data centers and semiconductor fabs from polluting our waters with PFAS. (To learn more about the Local Action Network, please email rand@chipscommunitiesunited.org. To learn more about Forever Ends Here, reach out to brenda@chipscommunitiesunited.org.)
If you have anything to share with the network or any questions about how to get involved, you can email me.
Thanks for all you do!
Judith
The Big Story: Trump invokes national security to challenge state environmental protections
The US Department of Justice has begun intervening in local fights over data centers and semiconductors, claiming the AI infrastructure is essential for national security. In Mississippi, where the NAACP was suing xAI for endangering public health by running gas turbines, the DOJ asked the judge to dismiss the suit, claiming the company is integral to military operations—including the Iran War.
Something similar is happening in New York, where CCU partner Jobs to Move America and local residents are suing the county for serious, unresolved concerns about the potential environmental, health, and community impacts of Micron’s planned semiconductor manufacturing facility outside of Syracuse. This week, the Department of Justice filed a “statement of interest” in the case, arguing that national security grounds justify the environmental violations and calling on New York to weaken its environmental protections to align with (weakened) federal standards.
JB Branch of Public Citizen predicted this a year ago: “Trump intends to designate AI data centers as national security assets, allowing the federal government to usurp federal, state and local law—including zoning—to force data centers and fossil fuel infrastructure onto communities.”
It’s connected to the president’s efforts to invoke AI and national security to dismantle generations of public health and safety laws in order to promote coal, natural gas, and nuclear power generation.
The CHIPS Act: Alive and well?
The Trump administration has continued to make awards to companies under the CHIPS Act incentive program. You can learn about the recent awards here, but here are a few highlights:
- The German company Bosch received a final funding award of $225 million from the US Commerce Department to make chips for cars in Roseville, CA. The company has begun production.
- GlobalFoundries will receive up to $300 million to accelerate the domestic research and development of co-packaged optics. This grant, as far as we can tell, is on top of the $1.5 billion previously awarded the company. (Did you know that the Abu Dhabi sovereign wealth fund owns more than 80% of GlobalFoundries? Now you do. See above about the link between fossil fuels and AI hardware.)
- USA Rare Earth will receive $277 million in federal incentives and a loan agreement for up to $1.3 billion to onshore the supply of 12 critical and strategic minerals and establish production capability for rare earth magnets. There are potential conflicts of interest around this grant, but then that applies to many of the business dealings of this administration.
For all of these grants, the Commerce Department exchanged cash for equity stakes in each company.
Meanwhile, some companies that signed binding final contracts with the Commerce Department for CHIPS Act grants during the Biden presidency have still not received all (or any) of the promised funds. Korean news reports that US Commerce Secretary Lutnick is pressuring Samsung and SK hynix to expand manufacturing in the US, though neither has received its full CHIPS Act grant.
Did you catch the president’s unhinged attack on the CHIPS act? He recently claimed that under the Biden administration, only companies with transgender executives could receive funding.
I’ve been anticipating this. SEMI (an industry trade group) is calling on Congress to extend the lucrative 48D tax credit (part of the CHIPS Act), which gives chip makers a 35% cash refund for every dollar they spend on manufacturing equipment and facilities. The corporate welfare only applies to projects that break ground by the end of 2026, but industry wants more.
Chips and the environment
Greenpeace East Asia has produced a powerful video about the environmental impact of the AI boom in Taiwan. Some of this is happening in the US already and more of it will follow, as we build more data centers and expand domestic semiconductor manufacturing.
Are you worried about water use by data centers? Manufacturing the chips in those centers uses even more.
CCU in the news
Jennifer Martin McLeod, water sentinels manager with the Grand Canyon Chapter of the Sierra Club, warns that Arizona’s water can’t afford the CHIPS Act’s broken promises.
In New Mexico, CCU partners Good Jobs First reports that Intel’s tax breaks are costing the school district thousands of dollars per pupil.
PFAS (toxic “forever chemicals”) and the AI boom
CCU’s Lenny Siegel, the director of the Center for Public Environmental Oversight, has revealed how data centers spread PFAS chemicals.
The 2026 National PFAS Conference took place in Tucson in June. You can see recordings of the sessions here.
The business of semiconductors
Data centers are driving a massive surge in demand for chips, triggering “the largest scale infrastructure build-out in the history of humanity.” As a result, we’re in a semiconductor “supercycle,” a massive, multiyear boom. And it’s transforming the US. “Since 2020, companies have announced more than 160 semiconductor ecosystem projects across over 30 U.S. states, representing more than $770 billion in private investment.”
However, chip stocks have been volatile in the last few weeks, as China revealed that it has developed its own tools for ultraviolet lithography, a critical step in making advanced chips, and until now entirely monopolized by a single company, the Dutch firm ASML.
The AI Boom is empowering workers. The big three companies that manufacture memory chips – Micron, Samsung, and SK hynix – are hauling in cash, hand over fist, as demand surges for their products. Earlier this year, Korean workers at SK hynix and Samsung forced employers to share some of the massive AI profits with them. Samsung workers in the company’s memory chip division threatened to go on strike; in order to keep them churning out chips, management committed to ten years of bonuses – in 2026, the bonus could be $400,000 per employee. But employees in other divisions at Samsung aren’t doing as well, and many of them are now sending their resumes to hynix, where employees are in line for a bonus of $476,000 this year. And the fever has also spread to Micron in Taiwan, where employees are talking about “performance-based incentives amid the AI boom and … possible strike action.”
Samsung saw its profits increase 250-fold in the second quarter. Yes, that’s right. Not 250%, but 250 times greater than the same period last year, signing multiyear deals with five major data center operators and entering negotiations with five more. The company expects the shortage of memory chips (which is driving these astronomical profits) to last through at least 2028.
Intel’s turnaround continues. Rival TSMC has sold all its chips for the coming year, so Google placed a big order with Intel. The company posted its fastest revenue growth in 15 years.
Meanwhile, TSMC has increased its planned investment yet again. Originally, the company planned to invest $65 billion in the US, but added another $100 billion in March of 2025. In July, the company announced yet another $100 billion, bringing total planned US investment to $265 billion and 12 fabs.
Arizona is emerging as a manufacturing center for AI chips, even as Texas is becoming a leader in making AI servers.
Here are some more details on Texas as the silicon state. “In recent months, a series of new or expanded semiconductor fabrication plants, or “fabs,” have begun operating or been announced in the Lone Star State, including the launch of Texas Instruments’ $40 billion semiconductor facility in Sherman late last year, Nvidia and Wistrom Corporation’s plans for two facilities in north Fort Worth, and Elon Musk’s massive “Terafab” semiconductor megafacility proposed in Grimes County. There are currently a total of 57 individual semiconductor facilities in the state, representing more than 47,000 workers across semiconductor fabrication plants, materials manufacturing and research and development…”
Meanwhile, in Oregon, the business community is warning that the semiconductor industry is in decline, citing a recent report that documents layoffs at Intel (reducing the company’s local workforce from around 23,000 to 18,000) and a $500 million decline in the income of workers in the chip industry.
Construction of the embattled SK hynix plant in Indiana is underway, despite a lawsuit from neighbors over zoning.
Nationally, tariffs on steel, aluminum, and copper make domestic chip production more expensive.
And more on data centers
Data centers have became a symbol of America’s rage.
Ohio is greenlighting massive fossil fuel expansion for data centers.
Sometimes we win. In the face of 7,000 angry public comments, Ohio scrapped a plan to make it easier for data centers to dump polluted wastewater, requiring each facility to get an individual permit instead.
Reporter Justine Calma at the Verge unpacks the environmental impact of data centers.
On the flip side, data center construction is creating good union jobs for workers in rural areas. The AFL-CIO and the Washington State Labor Council have both recently come out with nuanced principles to support data centers that are accountable and responsive to local communities.
Here’s a great article about a data center heist.
Want to learn more about the public health impacts of data centers? Here’s a webinar series from the American Public Health Association beginning August 5. Register here.
Americans for Responsible Innovation (ARI) launched DataCenterPlaybook.org, a website including field guides for voters, lawmakers, county officials, and non-profits interested in engaging with data center siting decisions in their communities.
That’s all for now. See you next time!
