The U.S. administration has announced that it has no plans to acquire stakes in semiconductor companies that are increasing their investments in the United States in exchange for subsidies.

According to the Wall Street Journal on the 21st (local time), a U.S. government official stated, “We have no intention of acquiring stakes in companies like TSMC and Micron that are increasing their investments in the U.S.,” adding, “However, companies that do not fulfill their commitments may have to provide equity to the government in return for subsidies.”

The U.S. administration appears to have retreated from considering acquiring stakes in semiconductor companies expanding their investments in the U.S. under the pretext of subsidies provided by the Semiconductor Act, following strong opposition from the semiconductor industry.

Foreign media reported that TSMC management decided not to accept $6.6 billion in subsidies if the U.S. administration proceeds with acquiring company stakes. TSMC indicated that it does not need to receive subsidies while handing over equity to the U.S. government, given its cash-rich situation.

Industry analysts suggest that the U.S. government has stepped in to manage the situation amid concerns that strong opposition from the semiconductor industry could lead to reduced investment in the U.S.

Previously, Reuters and other outlets reported that U.S. Commerce Secretary Howard Lutnick was considering a plan for the U.S. government to secure stakes in semiconductor companies receiving subsidies under the Semiconductor Support Act. Secretary Lutnick confirmed in an interview with CNBC on the 19th that negotiations were underway for the government to acquire a 10% stake in Intel, stating, “The administration may consider acquiring stakes in other companies as well.”

This led to speculation that companies such as TSMC, Micron, and Samsung Electronics, which are building semiconductor plants in the U.S. and receiving subsidies, could become targets for U.S. government stake acquisition. In December last year, during the Biden administration, the U.S. Department of Commerce signed contracts with these companies to provide subsidies of $6.6 billion (approximately KRW 9.2 trillion) to TSMC, $6.2 billion (approximately KRW 8.6 trillion) to Micron, and $4.75 billion (KRW 6.6 trillion) to Samsung Electronics under the Semiconductor Act.

As this news spread, the semiconductor industry reacted strongly, stating, “Demanding equity in exchange for subsidies is essentially ‘stock expropriation,’” and criticizing it as “interference in management rights and an infringement on investment freedom.” There were also criticisms that the U.S. administration was using tricks to withhold legally confirmed subsidies.

Although the U.S. administration has moved to manage the situation, the semiconductor industry is expected to remain in turmoil for the time being, as no official position has yet been announced.

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