The Taiwan chip giant is reportedly considering handing its CHIPS Act grants back to the US administration, given their pursuit of getting equity in the company.
TSMC Could ‘Refund’ the $6.6 Billion in CHIPS Act Subsidies If the Trump Administration Decides to Take a Stake
For those unaware, the Trump administration had been considering taking equity stakes in beneficiaries of the CHIPS Act, which include firms like TSMC, Intel, Micron, Samsung, and others. The government apparently sees the Biden-era incentive scheme as a ‘free-money’ distributing mechanism, and wants something from the beneficiaries in return. However, based on a report by the Wall Street Journal, TSMC executives are considering returning the CHIPS Act grants to the current administration to avoid the equity model being proposed.
We recently discussed why TSMC is worried about the USG getting a stake in the company, especially considering that the Taiwan giant has operated in America mostly by relying on its internal resources. More importantly, the Taiwanese media has labelled the move as the first step of the US ‘nationalizing’ TSMC, which shows that the chip giant is indeed under pressure regarding the current situation. To get out of it, the firm is considering returning around $6.6 billion in subsidies for the Arizona site.
Interestingly, the WSJ report also mentions that US government officials won’t look for equity in firms that are investing in the nation, and given that the Taiwan giant has pledged ‘hundreds of billions’ to manufacture in America, it seems like the possibility of TSMC giving out equity is pretty low for now. The ‘subsidy-for-equity’ model is apparently confined to firms like Intel, which are struggling and require an interest from USG, whether to revive brand image, or even pan out deals with other tech giants.
It would be interesting to see how the situation pans out between TSMC and the Trump administration, given that both parties have witnessed deepened cooperation over the past few months and that neither would like an agreement that could lead to a fallout in their relations.
