[Taiwan Chip News] "Americanizing TSMC?"... U.S. Ambitions to Seize Foundry Leadership

Will the U.S. Government Become the Largest Shareholder of TSMC?
Plans to Integrate TSMC's U.S. Plant as a Strategic Hub
Securing Domestic Bases to Protect American Companies

The Donald Trump administration has begun efforts to shift the global semiconductor supply chain to a "U.S.-centric system." Recently, the White House reportedly considered acquiring a stake in Intel and applying the same approach to other global companies, although it remains unclear whether this will be implemented. In Taiwan, concerns are rising that TSMC, the world's largest foundry and Taiwan's biggest company, could become a target.

According to local media such as Taiwan Economic Daily on August 25, U.S. Secretary of Commerce Howard Lutnick is reportedly pushing a plan in which the government would hold a 10% stake in Intel in exchange for providing cash subsidies. The controversy has intensified as news emerged that the same plan is being considered for TSMC and Samsung Electronics, both of which receive subsidies in the United States.

If the U.S. government were to secure a 10% stake in TSMC, it would surpass the Taiwanese government, which currently holds a 6.38% stake, becoming the largest shareholder. Industry insiders interpret this as a move by the U.S. government to effectively turn TSMC into an American company. They argue that government intervention in corporate governance under the pretext of subsidies would inevitably lead to a decline in earnings per share (EPS) and disrupt market order. In fact, immediately after these reports, the share prices of TSMC and Samsung Electronics plummeted on the Taiwan and Seoul stock exchanges, while TSMC's ADR dropped by more than 3% on the New York Stock Exchange.

On August 20, TSMC responded by stating, "We will not answer hypothetical questions." Kuo Tzu-hui, Taiwan's Minister of Economic Affairs, said, "If the U.S. government wishes to become a TSMC shareholder, it must undergo a review by the Investment Review Committee."

As concerns persisted, the U.S. government announced on August 21 (local time) that it had no plans to acquire stakes in global semiconductor companies such as TSMC and Micron, which are increasing their investments. The Wall Street Journal (WSJ), citing a White House official, reported that "the Department of Commerce is not considering holding stakes in companies like Taiwan's TSMC, which are expanding investments in the United States." However, the official added that companies not increasing their investment commitments might be required to provide equity in exchange for subsidies.

Nevertheless, U.S. pressure on global semiconductor companies to invest in the United States continues. Earlier this month, President Trump stated, "TSMC will build the world's largest semiconductor plant in Arizona and invest a total of 300 billion dollars," which led to tensions with the Taiwanese government.

Once a pioneer of the U.S. semiconductor industry, Intel has struggled in recent years to develop advanced process technology, falling behind AMD and failing to catch the early wave of the artificial intelligence (AI) era. Intel's poor performance is seen as having damaged America's reputation. Intel's next-generation 14A and 14A-E processes are scheduled for pilot production in 2027, but there are concerns that, without securing major customers, the company may consider halting development of these and subsequent advanced processes.

Some interpret the Trump administration's ultimate goal as integrating TSMC's U.S. plant with Intel's foundry division to establish a foundry hub as a "fully American company." A key issue for the U.S. semiconductor industry is the lack of long-term, stable wafer manufacturing capabilities. To protect American companies such as Qualcomm, Nvidia, and Apple, the United States aims to create a wafer foundry in which it holds the largest stake.

Taiwan Economic Daily News = Lee Mengshan, Chung Huiling / Translated by Asia Economy

*This column is published as part of a strategic partnership between Asia Economy and Taiwan Economic Daily News.