The Wall Street Journal (WSJ) reported on Thursday that Taiwan Semiconductor Manufacturing Company (TSMC) has rebuffed the U.S. government’s proposal to take equity stakes in companies receiving semiconductor subsidies.
According to sources familiar with the matter, TSMC executives have discussed the possibility of returning subsidies if the U.S. administration insists on becoming a shareholder.
TSMC is currently receiving 6.6 billion USD in subsidies from the U.S. government.
The sources revealed that TSMC, being cash-rich, sees no need for U.S. financial support and has indicated that if the administration seeks an equity stake, the company would opt to forgo the subsidies.
In response, a U.S. Department of Commerce official stated that they have no intention of acquiring stakes in companies like TSMC and Micron that are expanding their investments in the U.S. However, the official noted that companies that fail to meet their commitments may be required to offer equity in exchange for subsidies.
The WSJ article did not mention Samsung Electronics.
Previously, Commerce Secretary Howard Lutnick confirmed in a CNBC interview on Tuesday that the government is in negotiations to acquire a 10% stake in Intel Corporation. He added that the administration may consider acquiring stakes in other companies as well.
This statement sparked concerns that the U.S. government might seek to acquire stakes in other semiconductor giants such as Taiwan’s TSMC, South Korea’s Samsung Electronics, and U.S.-based Micron.
These concerns stem from the fact that all these companies are currently receiving U.S. government subsidies.
The U.S. Department of Commerce has established a 52.7 billion USD semiconductor fund, allocating 4.75 billion USD to Samsung Electronics, 6.2 billion USD to Micron, and 6.6 billion USD to TSMC just before the end of the previous administration.