US Govt Eyes Equity Stakes in Chipmakers for CHIPS Act Grants: Reuters

The US Commerce Secretary is exploring the possibility of the government taking a non-voting equity stake in Intel and other chipmakers in exchange for CHIPS Act grants. This move aims to encourage investment in the US semiconductor industry, which is critical for national security and economic growth. The affected publicly traded companies include AMD, Marvell, Microchip, Micron, Nvidia, Qualcomm, and Texas Instruments.

The U.S. Commerce Secretary, Howard Lutnick, is examining the possibility of the government taking a non-voting equity stake in Intel and other chipmakers in exchange for grants under the CHIPS Act. This initiative aims to bolster investment in the U.S. semiconductor industry, which is crucial for national security and economic growth.

Lutnick's proposal follows the Biden administration's earlier approach of providing cash grants to companies like Intel and Taiwan Semiconductor Manufacturing (TSMC) without requiring equity stakes. However, the Commerce Secretary has suggested that the government should receive an equity stake in return for the grants, as a way to secure a return on its investment. This move is part of a broader effort to revive U.S. manufacturing, a key agenda of the Trump administration.

The equity stakes proposed by Lutnick would be non-voting, meaning the government would not have control over the companies' operations. This approach is intended to address concerns about the government's involvement in corporate matters and potential risks to taxpayer funds. The Commerce Department oversees the $52.7 billion allocated under the CHIPS Act.

The Trump administration has previously made unusual deals with U.S. companies, such as allowing Nvidia to sell its H20 chips to China in exchange for the U.S. government receiving 15% of those sales. These deals have raised concerns among critics who argue that they create new categories of corporate risk.

The proposal by Lutnick comes amidst a mixed performance of chip stocks on Tuesday, August 19, 2025. Investors were cautious, awaiting signals from Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium. Astera Labs (NASDAQ:ALAB) and Advanced Micro Devices (NASDAQ:AMD) led the sector lower, while Intel (INTC) surged after Japan's SoftBank committed a $2 billion investment.

The U.S. government's involvement in the semiconductor industry has been a contentious issue. While some argue that it is necessary to maintain national security and economic competitiveness, others worry about the potential risks and the government's role in corporate decision-making.

References:
[1] https://www.reuters.com/business/media-telecom/us-examines-equity-stake-chip-makers-chips-act-cash-grants-sources-say-2025-08-19/
[2] https://finance.yahoo.com/news/astera-amd-lead-tech-selloff-213720123.html