Peter Harrell:
No, I think there are questions about legally how they are going to structure this.
So, if we look back, back in 2022, so three or four years ago now, Congress appropriated money for the CHIPS Act. The CHIPS Act had actually preceded getting money. Congress appropriated money. And then the Commerce Department went through a period of giving grants, which are clearly authorized by the CHIPS Act, to a range of companies, including Intel, including a company called TSMC, which is a Taiwanese company, including Samsung and others, to give those companies incentives to build semiconductors here in the U.S.
And the reason that the government didn’t take ownership in those companies then was really twofold. First, there’s a question about whether it’s legal. But, second, these are companies — these are not — this is not a bailout situation. These are companies that had been making chips very profitably overseas, and the government wants them to do it here.
And had the government said, we’re going to take equity in you if you come to the United States, the companies just would have said, thanks, but no thanks. We’re fine manufacturing in Taiwan and Singapore and Korea and places like that. So I don’t think that taking equity is really about — very helpful to getting the companies to onshore.
Now, Intel is a little bit different because Intel over the last couple of years has had some serious technological problems, some serious business problems. Again, we still have to get through, is this really legal? And I think it would be helpful for the Trump administration to spell out its legal rationale, because it was definitely not originally contemplated in the CHIPS Act.
