US government considers equity stakes in Micron $MU, TSMC $TSM, Samsung chipmakers to secure supply chains in 2025

The US government’s potential move to acquire equity stakes in major semiconductor manufacturers represents a bold shift in industrial policy, blending national security imperatives with economic incentives. As the administration explores converting CHIPS Act subsidies into ownership positions in firms like Micron Technology, Taiwan Semiconductor Manufacturing Company (TSMC), and Samsung, investors are confronted with a landscape where public funding could reshape corporate governance and market dynamics in the chip sector.

Government Stakes in Semiconductors: A New Era of Oversight

Recent developments indicate that the US is contemplating equity investments in key chipmakers that have benefited from the CHIPS and Science Act, a 2022 legislative package aimed at bolstering domestic semiconductor production. This act, with its $52 billion in grants and incentives, was designed to reduce reliance on foreign manufacturing, particularly amid geopolitical tensions in Asia. Now, reports suggest an expansion of this approach, where cash grants could be exchanged for shares in companies such as Micron, TSMC, and Samsung, building on similar discussions around Intel.

This strategy underscores a growing willingness to intertwine state interests with private enterprise. By taking stakes, the government could secure greater influence over production decisions, ensuring that subsidised facilities prioritise US needs in areas like advanced memory chips and logic processors. For instance, Micron, a leading US-based memory chip producer, has already received substantial CHIPS Act funding to expand its fabrication plants. Similarly, TSMC and Samsung, both foreign giants with significant US investments, are ramping up operations stateside, supported by these incentives.

Implications for National Security and Supply Chains

The semiconductor industry sits at the heart of modern technology, powering everything from consumer electronics to military hardware. Disruptions, such as those seen during the global chip shortage of 2021–2022, exposed vulnerabilities in supply chains dominated by Asian manufacturers. The CHIPS Act sought to address this by encouraging onshore production, with TSMC committing over $65 billion to Arizona facilities and Samsung investing $17 billion in Texas plants, as reported in various industry analyses.

Government equity could amplify these efforts, potentially mandating that a portion of output serves domestic defence and critical infrastructure needs. However, this raises questions about corporate autonomy. Would such stakes come with voting rights or merely economic participation? Early indications, drawn from White House statements, suggest a focus on non-controlling interests, akin to a 10% stake discussed in other cases, aimed at aligning incentives without direct board influence.

From an investor perspective, this could introduce both stability and uncertainty. On one hand, government backing might provide a buffer against market volatility, signalling long-term commitment to the sector. On the other, it could invite regulatory scrutiny or dilute shareholder value if stakes are acquired at below-market rates.

Company Spotlights: Micron and TSMC in Focus

Micron Technology, trading under MU on Nasdaq, exemplifies the potential beneficiaries—or targets—of this policy pivot. As of the latest session data dated 20 August 2025, shares closed at $122.05, reflecting a daily decline of 1.21% from a previous close of $123.55. The stock has shown resilience over the past year, climbing from a 52-week low of $61.54 to a high of $129.85, with a market capitalisation exceeding $136 billion. Micron’s forward price-to-earnings ratio stands at 9.48, based on expected earnings per share of $12.87, suggesting undervaluation relative to growth prospects in AI-driven memory demand.

Analysts maintain a ‘Buy’ rating of 1.5 for Micron, buoyed by its role as the largest US recipient of CHIPS Act funds after Intel. The company’s expansion in New York and Idaho, supported by billions in grants, positions it to capitalise on surging needs for high-bandwidth memory (HBM) in data centres. If the government secures a stake, it could further entrench Micron’s domestic footprint, potentially accelerating projects and enhancing its competitive edge against Asian rivals.

TSMC, listed as TSM on the NYSE, presents a more international dimension. Its shares ended the session at $232.70, down 3.61% from $241.41, with a 52-week range from $134.25 to $248.28. Boasting a market cap over $1.2 trillion, TSMC’s forward P/E is 28.80 on projected EPS of $8.08, earning a ‘Strong Buy’ rating of 1.4. The company’s $100 billion-plus investment in US facilities, including advanced fabs in Arizona, aligns with CHIPS Act goals, yet as a Taiwan-based entity, any US government stake could complicate cross-strait relations.

Samsung, while not publicly traded in the US in the same manner, has been a major player through its South Korean listing. Its Texas expansions, funded partly by $6.4 billion in US grants, highlight the act’s reach beyond American borders. Government equity here might aim to lock in technology transfers and job creation, but it could also spark debates over subsidising foreign firms.

Market Sentiment and Analyst Views

Sentiment from credible sources like Reuters indicates optimism among some investors, viewing government involvement as a bullish signal for the sector’s stability. Bloomberg reports have highlighted how such stakes could convert outstanding CHIPS funds—much of which remain undisbursed—into equity, potentially valuing these positions in the billions. Analyst models from firms like Seeking Alpha suggest that for struggling players, this could act as a lifeline, though for high-flyers like TSMC, it might introduce valuation pressures.

Forecasts from Wall Street analysts project robust growth: Micron’s current-year EPS is estimated at $8.11, with earnings due on 25 June 2025, while TSMC’s stands at $9.75, with results expected 17 July 2025. These figures, labelled as consensus estimates, point to a sector rebound driven by AI and electric vehicles.

Broader Economic and Investment Ramifications

This policy could set a precedent for other strategic industries, from renewables to biotechnology, where public funds buy influence. Investors should monitor how equity deals affect share dilution, dividend policies, and M&A activity. In a dryly humorous twist, one might say the government is trading cheques for chips—literally ensuring it gets a piece of the silicon pie.

Historically, government interventions in tech have yielded mixed results; the 1980s Sematech consortium aided US chip recovery, but today’s globalised market adds complexity. With geopolitical risks, such as tensions over Taiwan, equity stakes could hedge against supply disruptions.

For portfolios, this theme illuminates opportunities in diversified semiconductor ETFs or direct holdings in beneficiaries. Yet, risks abound: policy reversals under future administrations or international trade frictions could unsettle valuations.

Key Metrics at a Glance

In summary, the prospect of US government stakes in chipmakers heralds a fusion of state and market forces, potentially fortifying the sector against global headwinds while inviting new layers of complexity for investors.

References

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