Washington D.C. — Shares of major semiconductor companies fell sharply on Wednesday, August 20, following reports that the Trump administration is considering taking equity stakes in some chipmakers in exchange for federal funding provided under the CHIPS and Science Act.
Intel shares experienced the most significant hit, dropping by 7 percent, while Micron shares fell by 4 percent. Taiwan Semiconductor Manufacturing Co. (TSMC), a key global player, saw its shares slide by 1.8 percent. Other industry giants, Nvidia and AMD, also registered declines, down by 0.14 percent and 0.8 percent respectively.
The market reaction comes after Reuters reported on August 20, citing a White House official and another anonymous source, that Commerce Secretary Howard Lutnick has been working on a plan for the U.S. government to receive equity stakes 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 such funding, though the precise size of any potential government stakes remains undetermined.
While the White House and Department of Commerce did not respond to requests for comment from The Epoch Times regarding the report, Secretary Lutnick confirmed the administration’s intention for Intel on Tuesday. He indicated that President Donald Trump believes the United States should “get the benefit of the bargain” rather than simply issuing grants.
“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 instead of just giving grants away.”
Lutnick clarified that any federal investment would not result in the government obtaining a voting stake or governance rights over Intel’s operations. He did not disclose the proposed total stake in Intel.
The CHIPS Act, signed into law by President Joe Biden, was designed to boost domestic semiconductor production through billions of dollars in federal grants. Intel notably received nearly $11 billion in CHIPS Act grants, with TSMC awarded $6.6 billion and Micron $6.1 billion.
White House press secretary Karoline Leavitt confirmed during an August 19 press briefing 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 stated, though she did not confirm if similar requests would be extended to other chipmakers.
Treasury Secretary Scott Bessent, also speaking to CNBC on Tuesday, emphasized that the government’s aim is not to “take a stake and then try to drum up business.” He explained that the equity would come through converting existing grants and potentially increasing investment in Intel to help stabilize the company and expand chip production within the United States. Bessent highlighted the national security imperative behind the move, noting that “the single point of failure for the global economy is that 99 percent of the advanced chips in the world are made in Taiwan.”
TSMC declined to comment on the matter, while Intel and Micron did not immediately respond to requests for comment.
