The US government is considering taking equity stakes in Intel and other chipmakers in exchange for grants under the US$52.7 billion CHIPS Act, according to two sources cited by Reuters.

The CHIPS Act aims to boost domestic semiconductor manufacturing.

Commerce Secretary Howard Lutnick has discussed seeking a 10% government stake in Intel as part of this approach.

The plan may extend to other companies, with Treasury Secretary Scott Bessent also involved in the discussions.

White House Press Secretary Karoline Leavitt said the administration sees this as a way to secure a return on investment for taxpayers.

Lutnick noted any stake would be non-voting and would not give the government control over company operations.

Most funds under the CHIPS Act have yet to be distributed to firms like Micron, Taiwan Semiconductor Manufacturing Co, Samsung, and Intel.

TSMC and Intel declined to comment on the potential for government stakes.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Government equity stakes mark a shift from crisis intervention to strategic investment

The Trump administration’s plan to take equity stakes in chip companies represents a fundamentally different approach compared to historical government interventions.

Previous government equity acquisitions typically occurred during crises, such as the $180 billion AIG bailout during the 2008 financial crisis or the takeover of over 1,000 failed savings and loan institutions costing taxpayers $125 billion2.

The CHIPS Act equity model involves proactive investment in strategically important industries rather than emergency rescues of failing companies.

This approach transforms government funding from pure subsidies into investment partnerships where taxpayers potentially benefit from company success rather than simply covering losses.

2️⃣ The economics favor government equity over traditional grants