There have been recent debates about the CHIPS Act, and they are taking on new dimensions with the possibility of the U.S. government acquiring stakes in semiconductor manufacturing. This new measure is championed by the Trump administration and is part of a strategy to revitalize the national industry. This scenario represents a shift in the relationship between the state and the private sector and has sparked debates about financial risks, which directly impact the future of the country’s technological competitiveness.
What will be the US share of chip manufacturers?
U.S. Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel INTC. Oand other chipmakers in exchange for grants under the CHIPS Act, which aims to spur factory-building in the U.S., two sources said. As part of a plan to revive U.S. manufacturing – a key Trump agenda – Lutnick said earlier on Tuesday the U.S. government wants an equity stake in Intel in exchange for cash grants approved by the administration of former President Joe Biden.
Now Lutnick wants to expand that plan to other companies, according to a White House official and a person familiar with the situation. The Trump administration has recently made unusual deals with U.S. companies, including allowing AI chip giant Nvidia NVDA.O to sell its H20 chips to China in exchange for the U.S. government receiving 15% of those sales. The Pentagon is slated to become the largest shareholder in a small mining company to boost the output of rare earth magnets.
The government’s intervention in corporate matters has worried critics who say President Donald Trump’s actions create new categories of corporate risk and that a bad bet could mean a hit to taxpayer funds. Much of the funding under the CHIPS Act has not yet been dispersed for companies such as Micron MU.O, Taiwan Semiconductor Manufacturing Co 2330.TW, Samsung 005930.KS and Intel.
Intel: the center of negotiations
TSMC and Intel declined to comment. Micron, Samsung, and the White House did not respond to requests for comment on whether Lutnick is considering more stakes. The two sources told Reuters on Tuesday that Treasury Secretary Scott Bessent is also involved in the CHIPS Act discussions, but that Lutnick is driving the process. The Commerce Department oversees the $52.7 billion CHIPS Act money.
White House Press Secretary Karoline Leavitt confirmed earlier that Lutnick was working on a deal with Intel to take a 10% government stake. Lutnick’s comments suggested any stake would be non-voting, meaning it would not enable the U.S. government to tell the company how to run its business.
SoftBank’s investment in Intel
His comments came a day after SoftBank Group 998 T agreed to invest $2 billion in Intel, which has struggled to compete after years of management blunders. South Korean presidential advisor Kim Yong-beom said neither the government nor the potentially affected companies have heard about such a plan. He added that foreign companies like Samsung needed “predictability” for their U.S. investments.
What are the risks for the semiconductor sector?
According to expert analysis, this strategy of acquiring stakes, even if it doesn’t confer legal rights, ends up creating an unprecedented and difficult precedent for American industrial policy. On the other hand, the case could offer greater stability, especially for companies like Intel. As it raises doubts among foreign investors, there are questions about the degree of government interference in the situation and how this regulatory predictability applies to new investments in the United States.
These negotiations reveal a transitional scenario for the semiconductor industry. Between the quest to strengthen domestic production capacity and the fear of creating instability for foreign investment, the US walks a fine line. Negotiations involving Intel, the US government, and private investors like SoftBank could shape the course of American industrial policy in the technology sector.
GCN.com/Reuters