TSMC Faces Pressure as U.S. Floats Equity-for-Subsidy Rule

TSMC is once again caught between U.S. industrial policy and Taiwan’s fears of losing sovereignty. Reports from Washington suggest the Trump administration is considering a controversial ‘subsidy-for-equity’ requirement under the CHIPS Act, where any company receiving federal support would need to hand over part of its ownership to the U.S.

government. Commerce Secretary Howard Lutnick has described the model as a way to ensure taxpayer money cycles back into public hands, but for companies like TSMC, the move could cut far deeper than dollars and cents.

Intel, the biggest beneficiary of CHIPS Act funding, is already negotiating a potential 10% stake handover to Washington. Now, with Samsung, Micron, and TSMC under the same spotlight, the world’s largest contract chipmaker faces perhaps the thorniest challenge of them all. Unlike U.S. firms, TSMC has always operated outside of political entanglements. Taiwanese commentators warn that even a symbolic equity stake could shift the perception of TSMC from a neutral global foundry into something resembling an American-controlled asset. Some local voices have gone so far as to call it ‘highway robbery,’ equating the proposal to a backdoor nationalization of Taiwan’s crown jewel.

Washington insists any ownership stake would not affect operational independence, but critics argue the optics matter just as much as the reality. In Taiwan, the idea of TSMC giving up shares to a foreign government is seen as a risk not only to the company’s autonomy, but to Taiwan’s leverage in global tech geopolitics. The U.S., meanwhile, views it as a safeguard against pouring billions into companies without long-term public benefit.

For now, TSMC has not been forced into the equity-for-subsidy framework, and given the scale of its investments in Arizona, some analysts believe the company could receive exceptions. Still, the lingering question remains: is this a fair investment model, or the latest round of power politics in the semiconductor cold war?