ED Don't cross the line
US demand for equity in foreign chipmakers is a step too far
U.S. Commerce Secretary Howard Lutnick, right, speaks next to U.S. President Donald Trump, as they make an announcement about an investment from Taiwan Semiconductor Manufacturing Company (TSMC) in the Roosevelt Room at the White House in Washington, D.C., March 3. Yonhap
Recent reports that the Trump administration is considering acquiring equity stakes in foreign semiconductor companies, including Korea’s Samsung Electronics and SK hynix, in exchange for CHIPS and Science Act subsidies, represent a dangerous overreach of government power and a serious breach of trust. Such a move, if realized, would not only upend prior commitments made by the U.S. government but also undermine the principles of free-market capitalism the United States has long championed.
According to Reuters and other sources, U.S. Commerce Secretary Howard Lutnick has suggested that rather than offering subsidies as previously promised under the Biden administration, the new Trump administration wants something in return — namely, equity in the very companies building chip facilities on American soil. "We should get an equity stake for our money," Lutnick told CNBC. While the secretary noted that the U.S. would seek non-voting shares, such a move opens the door to future interference in corporate decision-making, eroding the autonomy of these firms.
This approach stands in stark contrast to the initial framework of the CHIPS and Science Act, which was designed to incentivize semiconductor manufacturing within the U.S. to strengthen supply chain resilience and enhance national security. Foreign firms, including Samsung and SK hynix, accepted the U.S. government’s terms in good faith, investing tens of billions of dollars in large-scale facilities while agreeing to limit investments in countries like China. These were not charity projects — they were mutual agreements intended to benefit both sides.
Samsung Electronics, for instance, is building a $37 billion advanced foundry in Texas, having secured $4.75 billion in subsidies. SK hynix is constructing a packaging plant in Indiana with $458 million in expected U.S. support. These companies are not struggling entities like Intel, which is reportedly prepared to offer a 10 percent stake to the government in exchange for funding. Rather, they are globally competitive firms, already delivering on their promises with their own capital, technology and workforce.
To demand equity after the fact is equivalent to moving the goalposts mid-game. It undermines the credibility of the U.S. as a reliable economic partner. Businesses make long-term, high-risk investment decisions based on the policy assurances of host governments. If those assurances are so easily reversed with an administration change, how can any nation or company trust the U.S. going forward?
Moreover, this proposal is reminiscent of state-capitalist models the U.S. has historically criticized. Using state resources to acquire corporate shares, particularly from foreign companies, smacks of the very economic nationalism and protectionism Washington has long warned others against. If the U.S. begins to take on interventionist policies resembling its strategic rivals, such as China, it risks losing its moral authority in championing the liberal economic order.
The idea that foreign companies should simply hand over equity — especially when they are already delivering strategic and economic value to the U.S. — is not only economically shortsighted but diplomatically toxic. It sends a chilling message to global investors: even completed negotiations are not safe from political opportunism.
Some analysts suggest that this new stance may be a way to avoid issuing the subsidies altogether, especially given Trump’s long-standing skepticism of the CHIPS and Science Act. If that is the case, it would be even more alarming. Backtracking on international commitments through technicalities or new conditions damages the U.S.' international standing and risks triggering legal and political retaliation.
Korea must respond firmly. The government should work closely with industry leaders and diplomatic counterparts to make clear that such demands are unacceptable. If the U.S. proceeds down this path, it could jeopardize not just Korean investment in America, but broader bilateral economic cooperation.
The principles of free enterprise, mutual respect and predictability in policy are the foundations of global commerce. The U.S. should remember that leadership in the global economy is not maintained by coercion, but by upholding the very values it seeks to promote. America must honor its word — or risk losing the trust that underpins its economic influence.