The Trump administration is considering taking equity stakes in companies receiving funds from the 2022 Chips Act but has no plans to seek shares in bigger semiconductor firms that are increasing their U.S. investments, according to a government official.
Commerce Secretary Howard Lutnick confirmed in a Tuesday interview with CNBC that the government is in talks to take a 10% equity stake in the troubled semiconductor company Intel and said the administration may consider equity stakes in other firms as well.
The comments fueled worries among industry executives that the government might also take equity stakes in large chip makers like Taiwan Semiconductor Manufacturing, Micron Technology and Samsung. Last month, the administration took a 15% stake in a producer of rare-earth materials.
“The Biden administration literally was giving Intel [money] for free, and giving TSMC money for free, and all these companies, just giving them money for free,” Lutnick told CNBC. “Donald Trump turns that into saying, ‘Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action.’”
A Taiwan Semiconductor Manufacturing Co. fabrication plant in Phoenix.
In one sign such a move would have faced opposition from companies, TSMC executives have had preliminary discussions about handing back their subsidies if the administration asks to become a stockholder, people familiar with the discussions said.
TSMC was awarded up to $6.6 billion in subsidies for a vast site in Arizona that started producing advanced chips in late 2024. The company agreed to build plants in Arizona under pressure from the Biden administration, but people briefed on TSMC’s thinking said the company has never relied heavily on U.S. financial support. TSMC declined to comment.
The government official said Thursday that the administration isn’t looking to own equity in companies like TSMC that are increasing their investments. Businesses that aren’t boosting their pledges could need to give the government equity in exchange for subsidies.
“The Commerce Department is not looking to take equity from TSMC and Micron,” the official said.
Lutnick has been asking companies receiving Chips Act grants to increase their total investments in the U.S., hoping to negotiate better terms for taxpayers. The law authorized tens of billions of dollars in grants, loans and other subsidies to spur domestic semiconductor manufacturing by companies including Intel and TSMC.
The approach is the latest from the administration rewarding or punishing tech companies based on their U.S. investments. President Trump recently said he would exempt companies spending more in the U.S. from roughly 100% tariffs on chip imports.
Trump’s interventions in the private sector have fueled anxiety among corporate executives about who may be targeted next. The government is taking a 15% cut of sales to China from chip companies Nvidia and Advanced Micro Devices. Before accelerating negotiations with Intel recently about converting some of its Chips funding into an equity stake, Trump called on Chief Executive Lip-Bu Tan to resign over his ties to China.
The Chips Act was originally conceived during the first Trump administration as a way to attract TSMC and other manufacturers to the U.S. and account for higher manufacturing costs. The program’s slow implementation, uncertainty caused by the administration change and tariff tensions have hampered its efficacy.
Lutnick is considering converting some of Intel’s Chips Act grants into equity. Any such efforts could face legal challenges based on how the deals were previously written. The law requires profits above certain levels to be shared with the government.
Write to Robbie Whelan at robbie.whelan@wsj.com, Yang Jie at jie.yang@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com
