Trump administration plans minority stakes in seven technology companies
The U.S. Commerce Department said this week that it will provide more than $870 million in federal incentives to the semiconductor manufacturing sector in exchange for minority stakes in seven companies. On Wednesday, the National Institute of Standards and Technology, or NIST, said in a blog post that the Commerce Department's CHIPS Research and Development Office had signed letters of intent with the seven companies. Under the landmark CHIPS and Science Act, the companies will receive a total of $874 million in federal funding. NIST said the money will support research and development in critical technologies and advanced integrated photonics, a microchip technology that uses light rather than electricity to transmit and process data. The funding will also support computing architectures and memory for computing and artificial-intelligence systems. "As a condition of receiving the funding, the Department of Commerce will receive a minority, noncontrolling equity interest in each company to enhance the return on American taxpayers' investment," NIST wrote. GlobalFoundries, a semiconductor manufacturer, will receive up to $300 million to strengthen research and development into next-generation silicon photonics. Kepler will receive up to $245 million to develop new artificial-intelligence memory technology. NIST said Multibeam Corp., which focuses on maskless semiconductor lithography, will receive up to $140 million to develop advanced chip-packaging equipment. The remaining funds will be distributed among Extropic, a producer of novel processor chips; Thintronics, a PCB-substrate manufacturer; Obsidia Semiconductors, a maker of thermal-imaging sensors; and Aeluma Inc., a producer of optoelectronic and electronic devices. Each company will receive between $30 million and $75 million for multiple projects involving low-power computing technology, advanced chip materials and inspection systems capable of identifying counterfeit components. Commerce Secretary Howard Lutnick said in a news release: "These strategic investments will strengthen domestic industrial capacity, create high-paying jobs and maintain the United States' leadership in the semiconductor industry." Nearly a year ago, the Trump administration reached an agreement with Intel to invest $8.9 billion in the company in exchange for a 9.9% stake. The investment was funded with $5.7 billion in subsidies previously awarded to Intel under the CHIPS and Science Act but not yet paid, along with another $3.2 billion in government funding for a separate program. After the transaction, the U.S. government became a major Intel shareholder. The move sparked considerable controversy and drew criticism from some of Trump's Republican colleagues. Sen. Todd Young, an Indiana Republican and one of the drafters of the CHIPS and Science Act, said at the time that the law was never intended to have the federal government hold a significant stake in Intel or any other large company. The legislation, signed into law by then-President Joe Biden in 2022, was intended to increase U.S. chip-production capacity by providing federal subsidies to domestic semiconductor manufacturers. Despite strong opposition last summer, the Trump administration in December provided $150 million in federal incentives to xLight, a startup developing laser technology, under the CHIPS and Science Act and received an equity stake in the company. The government-equity model has also appeared in other strategic sectors, including critical minerals and quantum computing. In May, the Commerce Department said it would provide a total of $2 billion in grants to nine quantum-computing companies, with the transactions including provisions for the U.S. government to receive equity stakes.
On Wednesday, the National Institute of Standards and Technology, or NIST, said in a blog post that the Commerce Department's CHIPS Research and Development Office had signed letters of intent with the seven companies. Under the landmark CHIPS and Science Act, the companies will receive a total of $874 million in federal funding.
NIST said the money will support research and development in critical technologies and advanced integrated photonics, a microchip technology that uses light rather than electricity to transmit and process data. The funding will also support computing architectures and memory for computing and artificial-intelligence systems.
"As a condition of receiving the funding, the Department of Commerce will receive a minority, noncontrolling equity interest in each company to enhance the return on American taxpayers' investment," NIST wrote.
GlobalFoundries, a semiconductor manufacturer, will receive up to $300 million to strengthen research and development into next-generation silicon photonics. Kepler will receive up to $245 million to develop new artificial-intelligence memory technology.
NIST said Multibeam Corp., which focuses on maskless semiconductor lithography, will receive up to $140 million to develop advanced chip-packaging equipment. The remaining funds will be distributed among Extropic, a producer of novel processor chips; Thintronics, a PCB-substrate manufacturer; Obsidia Semiconductors, a maker of thermal-imaging sensors; and Aeluma Inc., a producer of optoelectronic and electronic devices. Each company will receive between $30 million and $75 million for multiple projects involving low-power computing technology, advanced chip materials and inspection systems capable of identifying counterfeit components.
Commerce Secretary Howard Lutnick said in a news release: "These strategic investments will strengthen domestic industrial capacity, create high-paying jobs and maintain the United States' leadership in the semiconductor industry."
Nearly a year ago, the Trump administration reached an agreement with Intel to invest $8.9 billion in the company in exchange for a 9.9% stake. The investment was funded with $5.7 billion in subsidies previously awarded to Intel under the CHIPS and Science Act but not yet paid, along with another $3.2 billion in government funding for a separate program. After the transaction, the U.S. government became a major Intel shareholder.
The move sparked considerable controversy and drew criticism from some of Trump's Republican colleagues. Sen. Todd Young, an Indiana Republican and one of the drafters of the CHIPS and Science Act, said at the time that the law was never intended to have the federal government hold a significant stake in Intel or any other large company.
The legislation, signed into law by then-President Joe Biden in 2022, was intended to increase U.S. chip-production capacity by providing federal subsidies to domestic semiconductor manufacturers.
Despite strong opposition last summer, the Trump administration in December provided $150 million in federal incentives to xLight, a startup developing laser technology, under the CHIPS and Science Act and received an equity stake in the company.
The government-equity model has also appeared in other strategic sectors, including critical minerals and quantum computing. In May, the Commerce Department said it would provide a total of $2 billion in grants to nine quantum-computing companies, with the transactions including provisions for the U.S. government to receive equity stakes.