U.S. Equity Moves in Chip Companies Stir Controversy

U.S. Commerce Secretary Howard Lutnick proposes the government take equity stakes in Intel and other chip firms in exchange for CHIPS Act grants. While aiming to bolster U.S. manufacturing, the move has caused concern about increased corporate risk, potentially impacting taxpayer funds and corporate independence.

U.S. Commerce Secretary Howard Lutnick is exploring a novel approach of acquiring equity stakes in Intel and other semiconductor firms. His proposal, involving the exchange of stock for grants under the CHIPS Act, seeks to rejuvenate U.S. manufacturing, reflecting former President Donald Trump's economic agenda.

Lutnick's plan, as reported by reliable sources, indicates expansion to include additional companies. Recent governmental agreements with firms like AI chip leader Nvidia highlight this trend, positioning it as a fiscal strategy concerning rare earth magnets and lucrative market growth.

However, the initiative, which includes substantial contributions from Treasury Secretary Scott Bessent, has critics questioning the creation of new corporate risks and potential taxpayer losses. Reactions from companies such as TSMC show complexity, requiring careful negotiation and analysis to understand broader impacts.

(With inputs from agencies.)