TMTPOST -- South Korea’s presidential office on Thursday denied reported Washington’s possible acquiring equity stakes in South Korean companies in exchange for their receiving U.S. government subsidies.
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Calling the reports “groundless”, the presidential spokesperson Kang Yu-jung said there isn’t any South Korean chipmakers that have received the U.S. grants under the relevant act. "(South Korean) companies have confirmed they have not received such contact (from the U.S. government)," Kang told reporters.
Earlier this week, more chipmakers were reported to be the targets after the Trump administration confirmed it is in talks with Intel over the company’s stake.
U.S. Commerce Secretary Howard Lutnick on Tuesday said Intel must give the U.S. government an equity stake in the company in return for the funds it was granted under the CHIPS and Science Act of 2022 (CHIPS Act). He assailed the act signed by former President Joe Biden for giving semiconductor manufacturers subsidies without any return for U.S. taxpayers.
Signed into law in August 2022, the CHIPS Act allocated $53 billion in federal incentives for domestic semiconductor manufacturing and research and development (R&D), of which $39 billion is set aside for a financial assistance program—also called the CHIPS for America Fund—administered by the U.S. Department of Commerce to build new and expand existing semiconductor facilities. Companies are also eligible for a 25% tax credit.
“Why are we giving a company worth $100 billion this kind of money? What is in it for the American taxpayer? And the answer Donald Trump has is we should get an equity stake for our money,” Lutnick said in a CNBC interview. “So we’ll deliver the money which was already committed under the Biden administration, we’ll get equity in return for it.”
Lutnick said the plan to get a stake would not give the U.S. governance or voting rights in the company, even though it could make the federal government Intel’s largest shareholder.He also signaled President Donald Trump could seek clinching similar deals with other recipients of CHIPS funds.
“The Biden administration literally was giving Intel for free, and giving TSMC money for free, and all these companies just giving them money for free,” Lutnick said. “Donald Trump turns that into saying, ‘Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action.’”
Lutnick is working on how the U.S. federal government can receive stakes in exchange for funds under the CHIPS Act Incentives Program for companies such as Micron Technology, Inc., Taiwan Semiconductor Manufacturing Co., (TSMC) and Samsung Electronics, Reuters later Tuesday reported.
U.S. Treasury Secretary Scott Bessent is also involved in the CHIPS Act discussions, but it is Lutnick who is driving the process, per the report, noting that the Commerce Department oversees the $52.7 billion CHIPS Act.
