Trump Admin. May Expand Stake-Taking Deal with Intel to Samsung and TSMC

TMTPOST -- The Trump administration may use the deal that allows it to take a stake in Intel Corporation as a model, and apply it to other chipmakers that have been granted funds under a legislation designed to reshore semiconductor manufacturing.

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U.S. Commerce Secretary Howard Lutnick is exploring the federal government taking stakes in computer chip makers that receive the CHIPS and Science Act of 2022 (CHIPS Act) funding to build facilities in the country, Reuters cited sources on Tuesday. The report suggested Lutnick is weighing expanding on a plan to receive an equity stake in Intel in exchange for cash grants.

Lutnick was reported to be working on how the U.S. federal government can receive stakes in exchange for funds under the CHIPS Act Incentives Program for companies such as Micron Technology, Inc., Taiwan Semiconductor Manufacturing Co., (TSMC) and Samsung Electronics.

U.S. Treasury Secretary Scott Bessent is also involved in the CHIPS Act discussions, but it is Lutnick who is driving the process, per the report, noting that the Commerce Department oversees the $52.7 billion CHIPS Act.

Signed into law in August 2022, the CHIPS Act allocated $53 billion in federal incentives for domestic semiconductor manufacturing and research and development (R&D), of which $39 billion is set aside for a financial assistance program—also called the CHIPS for America Fund—administered by the U.S. Department of Commerce to build new and expand existing semiconductor facilities. Companies are also eligible for a 25% tax credit.

While U.S. and foreign companies with facilities in the United States are eligible for the CHIPS Act, Intel was already deemed as the biggest beneficiary of the federal incentives.

Intel under the act was awarded $7.9 billion in grants for commercial semiconductor manufacturing and as much as an additional $3 billion for the Pentagon’s Secure Enclave program. It also has an option to draw an $11 billion loan under the act. Memory chipmaker Micron is the second biggest U.S. recipient of the cash funds. Neither Micron not TSMC or Samsung commented on the report.

Lutnick earlier Tuesday said Intel must give the U.S. government an equity stake in the company in return for the funds it was granted under the CHIPS Act. He assailed the act signed by former President Joe Biden for giving semiconductor manufacturers subsidies without any return for U.S. taxpayers.

“Why are we giving a company worth $100 billion this kind of money? What is in it for the American taxpayer? And the answer Donald Trump has is we should get an equity stake for our money,” Lutnick said in a CNBC interview. “So we’ll deliver the money which was already committed under the Biden administration, we’ll get equity in return for it.”

Lutnick said the plan to get a stake would not give the U.S. governance or voting rights in the company, even though it could make the federal government Intel’s largest shareholder.He also signaled President Donald Trump could seek clinching similar deals with other recipients of CHIPS funds.

“The Biden administration literally was giving Intel for free, and giving TSMC money for free, and all these companies just giving them money for free,” Lutnick said. “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.’”