U.S. Seeks Equity Stake in TSMC in Exchange for Subsidies

TaiwanPlus News

The U.S. government may want an equity stake hold in chipmakers like Taiwan's TSMC in exchange for CHIPS Act subsidies. The news has reverberated throughout Taiwan's chip industry and the stock market.

Transcript

00:00Taiwanese chipmaker TSMC could soon have a powerful new stakeholder, the U.S. federal

00:05government. The Trump administration wants equity in companies that build factories in

00:10the U.S. with funding under the CHIPS Act. U.S. Commerce Secretary Howard Lutnick told

00:15CNBC this new policy turns what he calls a giveaway to corporate giants into something

00:20that benefits the United States.

00:22I mean, why in the world is the United States of America taking money and giving it to companies

00:27like TSMC, which is worth a trillion dollars? I mean, why would we give them money to come

00:33to America? Donald Trump understands how to do this. What he does is he says, if you don't

00:38build in America, you're going to pay a 100% tariff and then watch them come flying in.

00:46The U.S. Commerce Department decided to give TSMC over six billion U.S. dollars in subsidies

00:51at the end of last year. Now, though, in Taiwan, there are worries the Trump administration

00:56will strengthen its intervention in the semiconductor industry, a pillar of Taiwan's economy.

01:01TSMC has declined to comment, and the economy minister says he's still confirming what's

01:07happening.

01:07But Taiwan's stock market hasn't waited for confirmation. TSMC's stock dropped 66 U.S.

01:32cents at the start of trading Wednesday, and continued to slip, with share prices hitting

01:36a low of just under 38 U.S. dollars later in the day. It dragged the rest of the market

01:41down with it, with the main stock index falling over 600 points. Analysts have big questions

01:47about what U.S. government involvement in the industry will mean for TSMC.

01:51And it's not just TSMC. Other big industry players also face a U.S. attempt to gain some influence

02:15through equity. The questions now are whether this attempt will work, and how the companies

02:20involved will respond. Luffy Lee and John Van Trieste for Taiwan Plus.

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