Is Washington using subsidies to take equity stakes in semiconductor firms?
The move evokes parallels with Egypt after the Suez Crisis and Russia following the Ukraine war.
Analysts warn of shaken investor confidence and the risks of creeping nationalization.

The global semiconductor industry has been thrown into turmoil after President Donald Trump’s administration declared that subsidies under the Biden-era CHIPS Act would be taken back in the form of equity stakes. Analysts say the move recalls the nationalization drives of Egypt during the Suez Crisis in the 1950s and Russia’s actions following the outbreak of the war in Ukraine.

U.S. Chip Subsidies Turn Into Shackles, Not Support

On August 19, Reuters reported that the Trump administration is considering a plan to take equity stakes in semiconductor manufacturers receiving subsidies under the CHIPS Act. The move, already in discussion with Intel—recipient of a $10.9 billion subsidy—could extend to TSMC, Micron, Samsung Electronics, and SK Hynix.

Washington is eyeing roughly a 10% stake in Intel, calculated from its $110.7 billion market capitalization and the subsidy size. If applied uniformly, the formula would give the U.S. government about 0.5% of TSMC, 4.5% of Micron, 1.5% of Samsung Electronics, and 0.3% of SK Hynix. These companies are set to receive subsidies of $4.75 billion, $6.2 billion, $6.6 billion, and $458 million, respectively.

Though the demand is seen as unprecedented and aggressive, the Trump administration argues it is in the interest of U.S. taxpayers. Commerce Secretary Howard Lutnick told CNBC: “President Trump believes America must benefit from these deals. Why should we hand out subsidies to companies worth over $100 billion without getting something in return? We will honor the funds promised under the Biden administration but ensure taxpayers receive equity stakes in exchange.”

Side Effects of Egypt’s Nationalization Policy

Experts note that the U.S. government’s latest move evokes memories of the “Suez Crisis” of the 1950s. The Suez Canal in Egypt, completed in 1869 by French engineer Ferdinand de Lesseps, was originally owned 56% by French private investors and 44% by Egypt’s Khedive Isma’il. In 1875, facing bankruptcy, Egypt sold its 44% stake to Britain, allowing France and Britain to jointly control the canal and claim most of its revenue.

In 1952, after a coup that abolished the monarchy, Gamal Abdel Nasser unilaterally nationalized the canal, arguing that Britain and France’s dominance over its profits was a relic of imperialism. Egyptian forces seized the canal, prompting then–UK Prime Minister Anthony Eden to launch a military intervention with France and Israel. Though they swiftly regained control, their actions were condemned internationally as imperialist. Even the U.S., a key ally, sanctioned Britain and France by canceling oil supply agreements, while the Soviet Union threatened nuclear retaliation in support of Egypt. Ultimately, the invading powers withdrew empty-handed, and Nasser emerged as a hero of Arab nationalism and a revolutionary leader.

Afterward, Nasser’s regime expanded nationalization: beginning in 1957 with foreign-owned firms and extending through 1960–1961 to banks, insurers, and major industries. However, this path undermined Egypt’s “welcome policy,” which was meant to signal safety and incentives for foreign investors. Instead, it heightened fears of expropriation and discouraged capital inflows. Nationalization thus became both a symbol of sovereignty and a misstep that constrained foreign investment.

Russia’s Overreach on Nationalization Backfires

In recent years, Russia has accelerated its nationalization drive. In 2022, a government commission announced plans for legislation that would effectively seize assets of foreign firms leaving Russia. The proposal targeted companies with more than 25% ownership by investors from “unfriendly” nations, allowing external court-appointed management to take control if operations were suspended. Market watchers quickly criticized the bill as a thinly veiled step toward nationalizing foreign-owned enterprises.

By April 2023, President Vladimir Putin signed a decree enabling the state to place such assets under “temporary management,” effectively implementing the law. The move came in retaliation after Western countries froze large volumes of Russian assets. Soon after, major foreign firms fell under state oversight, including Carlsberg’s Baltika Breweries, Uniper’s Russian subsidiary Unipro, and shares held by Finland’s Fortum.

The policy has since escalated to outright nationalization. In July, a Russian court ordered the transfer of U.S.-owned canned food producer Glavproduct into state hands, ending months of legal battles. The case, initiated by Russian prosecutors, marked one of the clearest examples of a private Western-owned business being fully absorbed into state property. Glavproduct, Russia’s largest canned food maker, was owned by American citizen Leonid Smirnov through his U.S.-based firm Universal Beverage before being placed under state supervision last October.

Analysts warn that such moves will carry long-term costs. One market expert observed: “Russia’s asset seizures may have provided short-term leverage, but the long-term risks are severe. Legal disputes, further isolation from global markets, and eroding investor trust will continue to mount.” He added, “Foreign investors now assume property rights can be stripped away at any time. Unless this fear is resolved, Russia will struggle to attract capital again.”