TSMC Under Scrutiny as U.S. Officials Consider CHIPS Act Beneficiaries; Local Media Labels It ‘Highway Robbery’

The Trump administration is considering the acquisition of equity stakes in beneficiaries of the CHIPS Act, placing TSMC in a potentially precarious situation regarding its autonomy.

The Impact of Trump’s Equity Model on Samsung, Micron, and TSMC

Recently, there have been discussions led by Commerce Secretary Howard Lutnick about implementing a ‘chip subsidy-for-equity’ framework. This model entails that companies receiving grants under the CHIPS Act will need to offer a share of their equity to the government. TSMC, among other key industry players like Samsung and Micron, could be compelled to comply with this equity exchange, which presents significant political and financial challenges.

One notable application of this subsidy-for-equity initiative includes the Trump administration’s ongoing negotiations to secure a 10% equity stake in Intel, identified as one of the largest recipients of CHIPS Act funding. Similar scrutiny is now applied to firms like Samsung, Micron, and TSMC. However, for TSMC, a potential equity offer poses a particularly complex dilemma, which warrants a closer examination.

Rapidus semiconductor facility in Japan aiming for 2nm chip mass production by 2027 amid competition from TSMC and Samsung — Image Credits: TSMC

Reports from Taiwanese media suggest that any equity stake could significantly impact TSMC’s operational independence, as the company has historically navigated without political influence. Although U. S.officials assert that acquiring equity will not dictate operational decisions, critics view the measure as a method to return taxpayer money to the government. This situation creates an atmosphere of uncertainty for TSMC, especially as local commentators regard these actions as phenomena potentially leading to the ‘nationalization’ of Taiwan’s strategic semiconductor resources, effectively converting TSMC into a U. S.foundry.

At this time, discussions regarding a U. S.stake in TSMC are still speculative, and considering TSMC’s previous investments in Taiwan, it seems unlikely that this model will be implemented without significant resistance. Observers will need to stay tuned for future developments regarding this critical issue.

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