WASHINGTON — Shares of major semiconductor companies fell sharply on Wednesday following reports that the Trump administration is considering taking equity stakes in chipmakers in exchange for federal funding awarded under the CHIPS and Science Act.
The market sell-off was triggered by concerns over a potential shift in policy that would see the U.S. government become a direct shareholder in key technology firms. Intel Corp. took the biggest hit, with its shares plunging 7 percent. Other major players also felt the impact, as Micron Technology shares fell by 4 percent and global leader Taiwan Semiconductor Manufacturing Co. (TSMC) saw its stock slide 1.8 percent. Industry giants Nvidia and AMD also registered declines of 0.14 percent and 0.8 percent, respectively.
The market reaction followed a Reuters report on August 20, citing a White House official and another anonymous source, which detailed a plan being developed by Commerce Secretary Howard Lutnick. The plan would involve the U.S. government receiving equity in Intel and other major recipients of CHIPS Act grants. Micron, TSMC, and Samsung are among the companies that have received or are slated to receive billions in such funding.
While the White House and Department of Commerce did not immediately respond to requests for comment, Secretary Lutnick confirmed the administration’s intention for Intel on Tuesday. He stated that President Donald Trump believes the United States should “get the benefit of the bargain” from its investments.
“We should get an equity stake for our money, so we’ll deliver the money which was already committed under the Biden administration,” Lutnick told CNBC. “We’ll get equity in return for it, get a good return for the American taxpayer rather than just giving grants down.”
Lutnick clarified that any federal investment would not result in the government obtaining a voting stake or governance rights over Intel’s operations.
The CHIPS and Science Act, signed into law by President Joe Biden, was designed to boost domestic semiconductor manufacturing with billions of dollars in federal grants. Intel was a primary beneficiary, awarded nearly $11 billion, with TSMC receiving $6.6 billion and Micron $6.1 billion.
During a press briefing on August 19, White House Press Secretary Karoline Leavitt confirmed that the Department of Commerce is actively “ironing out the details” to secure a 10 percent government stake in Intel. “The president wants to put America’s needs first, both from a national security and economic perspective, and it’s a creative idea that has never been done before,” Leavitt said. She did not confirm if similar equity requests would be made to other chipmakers.
Treasury Secretary Scott Bessent, also speaking to CNBC, framed the move as a matter of national security. He explained that the equity would come from converting existing grants and potentially adding investment to help stabilize Intel and expand chip production within the United States.
“The single point of failure for the global economy is that 99 percent of the advanced chips in the world are made in Taiwan,” Bessent stressed, adding that the government’s goal is not to “take a stake and then try to tap up business.”
TSMC declined to comment on the matter, while Intel and Micron did not immediately respond to requests for comment.
