Raimondo questions tsmc subsidy: equity stake in the cards?

2025-08-20 tsmc

Washington, Wednesday, 20 August 2025.
Gina Raimondo is re-evaluating the CHIPS Act subsidies allocated to tsmc. She is considering swapping subsidies for equity. This echoes a similar approach considered by the trump administration. The potential shift has already impacted tsmc’s market value, with adr shares dropping by 2.37%. The secretary’s concerns highlight a broader debate about how the us government should invest in domestic chip manufacturing. The administration considers taking a 10% stake in intel. If an agreement is reached, it could set a precedent for other chipmakers seeking us funding.

Government influence and market concerns

The potential equity stake raises questions about government influence over tsmc’s strategic decisions [4]. Some analysts suggest it could provide the us government with greater control [7]. News of the potential change led to investor unease. Tsmc’s adr share price experienced a drop of 2.37%, a decrease of $5.71 [1]. This reflects concerns about the impact on tsmc’s profitability and expansion plans [1]. The situation highlights the delicate balance between national interests and market stability in the semiconductor industry [3].

Chips act and domestic manufacturing

The chips act aims to bolster domestic semiconductor manufacturing [1][2]. Howard Lutnick, the us secretary of commerce, has criticized the biden administration’s approach to subsidies [1][2]. Lutnick argues that the government should not provide free subsidies [2]. Instead, he advocates for acquiring non-voting shares to protect taxpayer interests [2]. The trump administration considered a similar strategy, seeking equity in exchange for subsidies [1]. This stance reflects a broader debate about the appropriate level of government intervention in the semiconductor industry [3].

National security and geopolitical factors

National security considerations are driving the push for domestic chip manufacturing [3][8]. Lutnick emphasized the need for the us to produce chips domestically, reducing reliance on taiwan [3][8]. He noted that taiwan is geographically close to china, increasing geopolitical risks [3]. Securing domestic chip production is part of a broader agreement with japan and south korea [3]. The goal is to establish sufficient infrastructure and capacity within the us [3]. This would ensure the nation’s ability to manufacture critical semiconductors [3].

Tsmc’s response and industry impact

Tsmc has responded cautiously to the potential equity stake [5]. The company stated that it does not comment on hypothetical situations [5][7]. The situation has sparked discussion on social media [7]. Some users expressed concerns about potential interference with tsmc’s management [7]. The taiwan stock market experienced a decline, partly attributed to the news [7]. One stock analyst suggested that the market downturn could present buying opportunities [7]. Tsmc’s chairman, wei zhejia, has stated that tsmc is not afraid of competition if conditions are fair [6].

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