Trump Administration Backs Down on Equity Stakes in TSMC, Micron

The Trump administration is not seeking equity stakes in TSMC or Micron in exchange for CHIPS Act grants, contrary to earlier speculation. Preliminary talks have shown that TSMC might consider returning the funding if the US government asks for a stake. Shares of both companies rose about 3% in recent trading.

The Trump administration has clarified its stance on the CHIPS Act, indicating it is not seeking equity stakes in Taiwan Semiconductor Manufacturing Company (TSM) or Micron (MU) in exchange for the grants. This clarification comes amidst earlier speculation that the administration might take a 10% ownership stake in these companies [1].

The Commerce Secretary, Howard Lutnick, had previously mentioned the possibility of the government taking equity stakes in semiconductor firms as part of the CHIPS Act. However, a Trump administration official recently stated that there are no plans to seek such equity stakes in TSMC or Micron [2]. This announcement has led to a significant market response, with shares of both companies rising about 3% in recent trading [3].

Preliminary talks have shown that TSMC might consider returning the funding if the U.S. government asks for a stake. This flexibility in negotiations could indicate a willingness on the part of TSMC to engage with the government's proposals, although a final decision remains uncertain [4].

The news of the administration's stance has brought some relief to investors and financial professionals, who were concerned about the potential dilution of shareholder value and the impact on balance sheets. The market's positive reaction reflects a reduced level of uncertainty regarding the future of these companies' relationships with the U.S. government.

The Trump administration's clarification also addresses broader concerns about the CHIPS Act's implementation and its potential to favor domestic rivals over international competitors. By not seeking equity stakes in TSMC and Micron, the administration may be aiming to avoid creating new categories of corporate risk and maintaining a more predictable investment environment for these companies.

In conclusion, the administration's decision to avoid equity stakes in TSMC and Micron provides a clearer picture of the CHIPS Act's future direction and has had a positive impact on the market. Investors and financial professionals can now better assess the potential risks and opportunities associated with these companies.

References:
[1] https://www.ainvest.com/news/tsmc-slides-1-76-weighs-equity-stake-chips-act-overhaul-ranking-14th-market-activity-2508/
[2] https://www.visiontimes.com/2025/08/20/us-considering-equity-stake-in-chip-makers-for-chips-act-cash-grants-sources-say.html
[3] https://www.investopedia.com/trump-administration-says-it-is-not-looking-to-take-stakes-in-tsmc-micron-11795868
[4] https://www.thehindu.com/sci-tech/technology/trump-administration-is-not-eyeing-equity-in-tsmc-micron-official-says/article69963312.ece