US government eyes stake in Samsung, TSMC in return for CHIPS Act funds

The US government is looking into taking equity stakes in chipmakers such as Samsung Electronics Co., Taiwan Semiconductor Manufacturing Co. (TSMC) and Micron Technology Inc., in exchange for CHIPS and Science Act grants, according to a Reuters report on Wednesday.

US Commerce Secretary Howard Lutnick is exploring how the federal government can receive equity stakes in the recipients of US subsidies to build semiconductor plants in the country, Reuters reported, citing a White House source and a person familiar with the situaion.

The sources added that Trump likes the idea of taking stakes in those chipmakers.

Samsung is one of the recipients of funding through the CHIPS and Science Act program.

In December, the Biden administration has finalized a $4.7 billion grant to Samsung to fund its construction of microchip facilities in Texas. Samsung plans to invest $37 billion to build the factory in Taylor.

The US Commerce Department also awarded $6.2 billion in subsidies to Micron and $6.6 billion to TSMC to produce semiconductors in the country. It is part of the $52.7 billion CHIPS Act under Commerce Department oversight.

In June, Lutnick said the department was re-negotiating some of former President Joe Biden's grants to semiconductor firms, calling them "overly generous.”

The Reuters report came as the Trump administration is discussing securing a 10% stake in Intel Corp. to shore up the embattled US chip giant amid Washington’s push to increase its influence in the semiconductor industry.

On Tuesday, Lutnick told CNBC that the US government must receive an equity stake in Intel in exchange for CHIPS Act funds.

“We should get an equity stake for our money,” Lutnick told CNBC’s Squawk on the Street. “So we’ll deliver the money, which was already committed under the Biden administration. We’ll get equity in return for it."

In the past, the US government has taken stakes in companies to provide cash.

In June, Trump approved Nippon Steel's purchase of US Steel Steel in exchange for a share of power, called a "golden share," making the US government a shareholder in the company.

"The president wants to put America's needs first, both from a national security and economic perspective, and it's a creative idea that has never been done before," White House Press Secretary Karoline Leavitt told reporters on Tuesday.

She referred to the talks about taking a 10% stake in Intel, which could see the US government become the chipmaker’s largest shareholder.

Write to Yeonhee Kim at yhkim@hankyung.com
Yeonhee Kim edited this article.