The Korea Times reported on its front page that the U.S. equity-for-subsidy program targeting Samsung faces questions about its feasibility.

Experts said the Trump administration is trying to bring foreign chipmakers under its influence.

There is increasing skepticism about the feasibility of the reporting plan by the Donald Trump administration, which aims to apply its equity-for-subsidy model not only to Intel but also to Samsung Electronics and other chipmakers receiving subsidies under the U.S. Chips and Science Act.

Experts and industry officials said on Thursday that the move seems "absurd," pointing out that the U.S. government had already allocated up to $4.75 billion directly to Samsung under the act last December. However, they warned that this unprecedented attempt should be seen as Washington's effort to place foreign chipmakers under its influence in order to reclaim its leadership in the chip manufacturing sector.

According to recent reports from U.S. news media, the Trump administration is seeking an equity-for-subsidy exchange model to save Intel and hopes to expand this model to other chipmakers eligible for incentives under the Chip Act.

U.S. Commerce Secretary Howard Lutnick said in an interview on Tuesday (local time) that the U.S. government will fulfill the incentives promised to Intel by the previous Joe Biden administration, but "we will get equity in return." This confirmed another report that the White House is discussing holding 10% of Intel's shares in exchange for a $10.9 billion subsidy, while a third report said Lutnick is exploring how to apply this measure to Micron, TSMC, and Samsung Electronics. The $10.9 billion in subsidies for Intel accounts for about 10% of its $110.8 billion market value. If the same scheme were applied to Samsung Electronics, the Trump administration might request around 1.6% of shares, a proportion equivalent to the stake held by Lee Jae-yong, chairman of Samsung Electronics.

If Samsung accepts this requirement and issues new shares, it could severely disrupt the company's already complex shareholding structure and also hinder its recent stock price rebound.

Although Samsung has declined to comment on the matter, many industry officials said the move was "absurd," as the incentive funds were legally entitled to Samsung for its investment in building a semiconductor factory in Texas.

An industry official said: "It makes no sense for the government to ask foreign companies for equity." It is not just a simple subsidy, but financial support under the Chips and Science Act, and refusing it would amount to the government refusing to implement the budget approved by the U.S. Congress."

Kim Young-bum, a policy advisor to the South Korean president, also told reporters on Wednesday: "This is baseless, and the relevant companies are unaware of it." He added, "The contracts under the Chips and Science Act have been finalized." The presidential spokesperson Kang Yu-jeong reiterated this statement on Thursday, saying, "Various rumors seem to be circulating before the South Korea-U.S. summit to gain an advantage." Another industry official said, "Even if the U.S. government receives 1.6% of shares, even if they are non-voting shares, there are risks, as this may expose business secrets, pricing policies, and other sensitive corporate strategies."

Professor Lee Jong-hwan from the Department of System Semiconductor Engineering at Sungkyunkwan University also said that the U.S. move seemed "contrived," but emphasized the importance of the potential intention behind the Trump administration.

Original: www.toutiao.com/article/1841114163452928/

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