chip act twist: us eyes equity in tsmc and samsung

2025-08-27 tsmc

Washington, Wednesday, 27 August 2025.
the us government is considering taking equity stakes in major chipmakers like tsmc and samsung in exchange for chips act funding. this potential move, initially proposed for intel, aims to safeguard us interests in critical chip manufacturing. taiwan semiconductor manufacturing company might return the approved subsidy of 6.6 billion usd, if the government insists on equity. under secretary raimondo is exploring this approach, which could reshape the financial landscape and control dynamics of these key industry players.

potential tsmc subsidy return

Taiwan Semiconductor Manufacturing Company (TSMC) may decline the 6.6 billion usd subsidy if the U.S. government insists on taking an equity stake [1][3]. This stance highlights a potential friction point in the implementation of the chips act. TSMC’s reluctance stems from not heavily relying on U.S. financial support [3]. Howard Lutnick, the Commerce Secretary, aims to secure better terms for taxpayers by potentially converting the subsidies into equity [3]. This approach aligns with the Trump administration’s policy of rewarding companies based on their investment in the U.S. [3].

market and manufacturing impacts

The U.S. government’s pursuit of equity stakes introduces uncertainty for TSMC (TSM:NYSE), impacting its market position and future expansion strategies [GPT]. Concerns arise regarding potential government interference in company operations [1]. Securing equity could give the U.S. influence over TSMC’s manufacturing capacity and strategic decisions [1]. This influence may extend to preventing the reduction or delay of committed investments, or the transfer of production and jobs outside the U.S [1]. Such intervention could affect investor confidence and TSMC’s stock valuation [GPT].

geopolitical and competitive risks

The situation introduces geopolitical risks for TSMC, given the U.S. government’s focus on domestic chip manufacturing [GPT]. The chips act, designed to attract manufacturers like TSMC to the U.S., aims to offset higher production costs [3]. However, slow execution and governmental uncertainties have hindered its effectiveness [3]. If TSMC declines the subsidy, it could reassess its U.S. expansion plans, affecting the nation’s goal to increase its chip production [2]. This scenario could intensify competition among global chip manufacturers and shift market dynamics [GPT].

government intervention precedents

The U.S. government’s consideration of equity stakes reflects a growing trend of intervention in the private sector [2]. The Trump administration previously implemented a ‘golden share’ mechanism when approving Nippon Steel’s acquisition of U.S. Steel [1]. This mechanism grants the U.S. government the power to veto significant decisions through national security agreements [2]. The government is also extracting 15% of proceeds from certain semiconductor sales to China [2]. These actions signal a more assertive role for the U.S. government in corporate affairs, potentially impacting future investments and operational strategies of tech companies [2][3].

Bronnen

chips act equity stake