The Trump administration is considering taking equity stakes in some companies receiving funds from the 2022 CHIPS Act, while excluding major semiconductor firms expanding in the US, according to the Wall Street Journal.

A US government official said that businesses not expanding commitments in the US may need to offer equity to the government in exchange for subsidies.

The official said that the Commerce Department is not seeking equity from TSMC or Micron.

TSMC, a Taiwan-based chipmaker that supplies Nvidia and Apple, has announced a US$100 billion investment in the US, including US$65 billion for three factories in Arizona.

The Commerce Department finalized US$6.6 billion in subsidies for TSMC to make semiconductors in the US as part of the US$52.7 billion CHIPS Act.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Government equity stakes signal shift from traditional industrial policy

The Trump administration’s consideration of taking equity stakes in CHIPS Act recipients represents a departure from the typical subsidy-only approach that has defined U.S. industrial policy for decades.

This selective equity strategy, targeting struggling companies like Intel while exempting expanding firms like TSMC, mirrors crisis-era interventions where the government took ownership positions to stabilize critical industries 1.

The potential 10% stake in Intel specifically suggests the administration views some semiconductor companies as requiring deeper government involvement beyond grants, similar to how the Treasury took equity positions in automakers and banks during the 2008-2009 financial crisis.

This approach could fundamentally alter the relationship between government and industry in strategic sectors, moving from arms-length funding to direct ownership stakes that give taxpayers both upside potential and governance influence.

2️⃣ Semiconductor supply chain vulnerabilities drive unprecedented policy responses

The combined $53 billion U.S. CHIPS Act and €43 billion EU Chips Act represent the largest coordinated industrial policy response to supply chain vulnerabilities in modern history 2.

These massive investments reflect genuine economic risks—COVID-19 chip shortages alone cost the U.S. automotive industry approximately four million vehicles in lost production 2.

The stakes extend far beyond normal economic disruption: analysts estimate that a potential conflict in the Taiwan Strait could trigger $10 trillion in global economic losses in the first year due to semiconductor supply disruption 2.

Recent TSMC developments