White House Says Firms That Build U.S. Fabs Won’t Face Equity Grab

White House Says Firms That Build U.S. Fabs Won’t Face Equity Grab; Intel Still in the Crosshairs

The White House signalled on Friday that the administration will not seek equity stakes in major chipmakers that follow through on large U.S. factory commitments, a decision that effectively spares companies such as TSMC and Micron from the kind of government ownership once floated as a condition for CHIPS Act support. The clarification comes amid broader deliberations inside the government about whether and how to convert planned CHIPS Act grants into equity in certain recipients.

Senior officials told reporters that the administration’s intent is to reward firms that materially increase U.S. manufacturing capacity rather than to force ownership in companies already investing heavily on American soil. The comments were framed as a practical compromise designed to keep large foreign and domestic investors engaged in U.S. semiconductor onshoring while preserving the option of taking stakes in firms that do not meet investment expectations.

The policy debate has been underway for several days. Reporting earlier this week described White House discussions about converting some CHIPS Act grants into equity stakes — a move advanced by a handful of administration officials as a way to ensure taxpayers receive a return on large subsidies. That proposal, if applied broadly, would have represented an unusual form of direct government ownership in private-sector technology firms. 

Notably, officials and multiple outlets singled out Intel as a likely candidate for closer scrutiny: Commerce Secretary Howard Lutnick has publicly discussed the possibility of the U.S. taking a stake in Intel while describing the idea as a conversion of previously promised grants, though he and other aides have said any stake would be structured to avoid day-to-day governance. The administration’s statements suggest a selective approach: companies that accelerate planned U.S. investments will be treated differently from those judged to be falling short. 

Industry reaction was immediate. Executives and trade groups welcomed the clarification for large-scale investors, saying it reduces political risk for firms that already have committed hundreds of billions in U.S. projects. TSMC — which has pledged vast investment in U.S. fabs — and Micron, which has also boosted U.S. capacity plans, were repeatedly cited by officials as examples of the sort of investment Washington wants to encourage. Some coverage noted earlier reporting that TSMC had considered returning subsidies rather than accept equity demands that could provoke political sensitivities in Taiwan.

Critics, however, warned that converting grant commitments into equity — even selectively — risks chilling private investment and complicating foreign-policy relationships. Policy groups and industry analysts argued that the CHIPS Act’s core objective is to expand production capacity, and that ownership stakes could introduce governance conflicts and deter future investors who prize operational independence. Others stressed that turning grants into government stakes would not solve deep technical or execution problems faced by some companies. 

Why this matters

The U.S. policy stance matters for three interlocking reasons. First, it affects where and how much foreign firms will invest in U.S. fabs — a central goal of the CHIPS and Science Act. Second, it shapes the financial outlook for domestic firms that have sought CHIPS funding to scale costly manufacturing projects; an equity-for-grants approach could dilute existing shareholders and change financing dynamics. Third, the move carries diplomatic weight: forcing equity stakes on foreign firms could strain relations with allied governments and with the industry’s global suppliers.

For Intel in particular, the discussions underscore a high-stakes bet by the administration: Washington appears willing to use the CHIPS program not only to underwrite capacity but also to influence corporate balance sheets and investor outcomes in strategically important firms. Whether that approach helps accelerate U.S. capacity or simply injects political risk into corporate decision-making will depend on how selectively and transparently equity demands are applied.

Implications and what to watch

This selective carve-out — sparing chipmakers that follow through on U.S. fab commitments — is a politically pragmatic outcome. It preserves the administration’s leverage while minimising the immediate diplomatic fallout that would follow if Washington had tried to compel stakes from globally sensitive players such as TSMC. That said, the episode exposes a deeper tension in industrial policy: how to balance taxpayer protection and return expectations with the need to keep markets friendly to the very private capital the policy seeks to attract.

Investors should read this development as reducing short-term headline risk for companies that have already announced large U.S. investments — a positive for firms like TSMC and Micron — while increasing conditional political risk for others that have not yet firmed up domestic projects. For Intel and similar firms, the government’s willingness to contemplate equity stakes is a double-edged sword: it could stabilise funding and reduce an existential solvency risk, but it introduces dilution and new governance optics that could weigh on valuations until terms are clarified.

What to watch next: official guidance from the Commerce Department detailing criteria for when grants could be converted to equity; any formal offers or term sheets to specific companies; and reactions from foreign governments — particularly Taipei — if large non-U.S. firms face retroactive conditions on previously announced subsidies. Market and corporate responses to those signals will determine whether this episode proves a one-off negotiation tactic or a durable change in how industrial subsidies are administered.

This article reports facts available from public news sources as of Aug. 22, 2025. It is not investment advice.