Taiwan Semiconductor Faces New Challenge As US Mulls Equity Stake Tied To CHIPS Act Subsidies

Semiconductor giant Taiwan Semiconductor Manufacturing Co TSM faces a new challenge as U.S. officials explore taking equity stakes in chipmakers receiving CHIPS Act support, a strategy that Taiwan’s economic minister described Thursday as needing additional scrutiny before approval.

Taiwan’s Minister of Economic Affairs Minister J.W. Kuo confirmed Washington may seek ownership stakes in the chipmaker under the $52.7 billion CHIPS Act, a proposal that sparked debate over its impact on the firm.

The Taiwanese contract chipmaker became the focus of potential U.S. government investment, Minister of Economic Affairs J.W. Kuo said Wednesday, adding that assessing the impact on the firm requires further discussion.

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Kuo told reporters ahead of a legislative Economics Committee hearing that any U.S. equity investment in the chipmaker would need review by Taiwan’s Department of Investment Review, the Taipei Times reported on Thursday.

His remarks followed U.S. Commerce Secretary Howard Lutnick’s statement that Washington is exploring equity stakes in chipmakers receiving CHIPS and Science Act subsidies to build U.S. fabs.

Expanding on plans for a potential 10% stake in Intel INTC, U.S. officials said Lutnick is evaluating similar approaches for Taiwan Semiconductor, Samsung Electronics SSNLF, and Micron Technology MU.

The Commerce Department, which oversees the $52.7 billion CHIPS Act, finalized subsidies last year of $6.6 billion for Taiwan Semiconductor, $4.75 billion for Samsung, and $6.2 billion for Micron.

Taiwan Semiconductor stock has climbed 16% year-to-date, supported by strong demand from top customers Nvidia NVDA, and Apple AAPL

Kuo said Taipei would continue discussions with Taiwan Semiconductor and GlobalWafers, both recipients of U.S. subsidies, to determine whether Washington may seek equity stakes.

He added that any move to secure a board seat or influence Taiwan Semiconductor’s operations would also require Department of Investment Review approval.

The minister compared Washington’s new approach to Beijing’s practice of holding large state stakes in private firms.

On tariffs, Kuo said he expects a final U.S. rate for Taiwan within three months, though negotiating a more favorable outcome could take up to six months.

Price Action: TSM stock is trading lower by 0.24% to $228.06 at last check Thursday.

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