The US government’s CHIPS Act was supposed to act as a grant to help the semiconductor industry in the US. It makes sense given that the biggest semiconductor company in the world, TSMC, is based in Taiwan. However, the Trump administration has taken it one step further by using the CHIPS Act to gain a stake in companies like Intel . Now, it seems that the Trump administration wants more deals like that .
Trump wants more deals like Intel
As part of Intel being a recipient of the CHIPS Act grant, the US government has acquired a 10% stake in the company. Ever the businessman, Trump himself has publicly endorsed the model, stating that he wants more deals like that. He also mentioned that he wants to make these types of arrangements “all day long.”
This move is part of a broader economic strategy. One that could result in the creation of a US sovereign wealth fund. There are currently several states that have their own sovereign wealth fund, but Trump proposed creating a national one. Earlier this year, Trump floated the idea of creating one, and that money could be used to acquire TikTok (which still hasn’t happened yet, by the way).
An earlier report also suggested that this could result in the US government gaining a stake not just in Intel, but also TSMC, Samsung, and Micron . From an investment point of view, it makes sense. However, there are some who have criticized the plan.
Government interference
These critics suggest that using the CHIPS Act to gain a stake in companies would result in a shift toward government interference in the private sector. They are also worried that it could result in regulatory overreach, and also the potential politicization of corporate decisions.
We’re already kind of seeing that in action. Some foreign companies, like Samsung, are making huge investments in the US just to escape Trump’s proposed tariffs. That being said, not everyone feels the same. In fact, the market has reacted quite favorably to this. Intel’s stock rose more than 5% following the government’s announcement.
