White House won't ask for ownership stake in TSMC or Micron in exchange for CHIPS Act funds — companies already investing more in the US expected to be exempt

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Spend more or give up some shares.

The White House
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TSMC and Micron are reportedly spared from Washington’s move to ask for an equity stake in exchange for CHIPS Act funding. According to the Wall Street Journal, a government official stated that there are no plans to request shares from CHIPS Act recipients that have or are increasing their investments in the country. “The Commerce Department is not looking to take equity from TSMC and Micron,” the official told the publication.

The talk of equity in exchange for the Biden-era grants gained steam when U.S. Commerce Secretary Howard Lutnick confirmed during a live interview with CNBC that the White House is in talks with Intel to acquire a 10% stake in the company for the nearly $8 billion allocated under the CHIPS Act. But what caught the attention of almost every other grant recipient is Lutnick’s planned expansion of this plan to other chip makers.

“We should get an equity stake for our money,” Lutnick said during the interview. “So, we’ll deliver the money, which was already committed under the Biden Administration. We’ll get equity in return for it; get a good return for the American taxpayer, instead of just giving grants away.”

Some entities have reacted to this statement, with South Korea denying that the U.S. will acquire shares in Samsung, the country’s crown jewel, whose revenue accounts for nearly 20% of its GDP. There were also discussions within TSMC to return the subsidies if Washington pushes through with its plan. To assuage the concern rippling across the industry regarding this plan, the White House clarified that companies that have already increased their investments beyond the original commitment under the CHIPS Act.

Jowi Morales
Jowi Morales
Contributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

7 Comments Comment from the forums
  • hotaru251
    NGL I actually support equity > grants for large corpos.
    It has downsides that grants don't have so if they frick up and need help from a Gov they are punished instead of getting a free parachute of tax payer $.
    Reply
  • JamesJones44
    Unlike Intel, who really doesn't have a choice, I would tell the gov to get lost on this deal. Instead I'll just close the plants and your companies can deal with the tariffs. None of these companies are likely to move away form TSMC at the moment. Micron, while its position is not as strong as TSMC's, is still has a strong position to say no thank you and walk away.
    Reply
  • 93QSD5
    Gov. having shares in private companies and interfering in their business...sounds very commi to me.

    The irony lmao.
    Reply
  • TerryLaze
    93QSD5 said:
    Gov. having shares in private companies and interfering in their business...sounds very commi to me.

    The irony lmao.
    The shares do not allow them to interfere, they do that anyway with other means.
    Also nothing is more capitalistic than wanting to have a piece of the action.
    Reply
  • micromax
    TerryLaze said:
    The shares do not allow them to interfere, they do that anyway with other means.
    Also nothing is more capitalistic than wanting to have a piece of the action.
    Yes, the shares do allow it, at least for the Intel deal. Have you not seen the details? US Gov't will have controlling interest in Intel and will be a decision maker in some of Intel's operations.
    Reply
  • TerryLaze
    micromax said:
    Yes, the shares do allow it, at least for the Intel deal. Have you not seen the details? US Gov't will have controlling interest in Intel and will be a decision maker in some of Intel's operations.
    I did, did you?!
    The gov bought ~10% of common stock.
    That gives them a vote, out of many at board meetings, and the right to give a point of discussion to the same.
    That is not what a controlling interest is, they just will have enough stock to barely be noticed.
    Reply
  • usertests
    baboma said:
    It's a bad idea because it creates a conflict of interest when the govt has a vested interest in a business' well-being. The govt's job is to regulate businesses.
    It was already decided that the government was going to have a vested interest in Intel's well-being when the CHIPS Act was being planned, and Intel was to be handed cash to prop up its "too important to fail" advanced EUV fab adventure.

    I don't know that this $8 billion stake really matters to the taxpayer, considering all of the government's assets and expenses. It's possible that the CHIPS Act money should be something like 10x the amount for each company, with some of it specifically allocated to R&D centers. There doesn't seem to be any more important technology around than nanoscale semiconductor fabrication, unless it is a deep, dark secret.
    Reply