South Korea's presidential office has denied that the U.S. government is looking to purchase Samsung stocks, with the Blue House saying that these are unfounded rumors. According to Digitimes, the speculation started after U.S. Commerce Secretary Howard Lutnick confirmed in a live interview that the White House is in talks with Intel to get a 10% stake in the company in exchange for the billions it received in CHIPS Act funding. There were also reports that Lutnick wanted to expand that deal to other CHIPS Act recipients, which include Samsung.
The South Korean conglomerate was set to receive more than $6 billion in CHIPS Act funding, which was designed to support the construction and expansion of its Taylor, Texas, fab. Although this is a much smaller amount than what Intel received, in both absolute terms and in relation to its market capitalization of more than $300 billion, the fact that there’s even talk of a foreign government taking a stake in South Korea’s crown jewel will stir trouble within its political and business realms.
Still, the Blue House's initial reaction from this news shows how protective it is of this conglomerate. Some estimates suggest that the company’s revenue makes up around 20% of South Korea’s GDP. So, despite the numerous domestic political scandals the company has been involved in in recent years, its government still wants to ensure that it remains an independent Korean company with no foreign influence, even if it’s coming from its own ally.
There will be a long and arduous negotiation if ever the U.S. pushes through with this idea and asks for equity in exchange for the money it has granted the company. All the parties involved would have to agree on what partial U.S. ownership would look like. Would it include seats on the board, or a say in how the company is run? Or would the U.S. simply let the company run and take any dividends it can get from its investment? And what would happen when the administration — in South Korea and the U.S. — changes its mind and wants to be more involved?
This isn’t the first time that a national government has had a stake in a semiconductor company. For example, TSMC is also partially owned by Taiwan and the Singapore wealth fund. However, these are questions that must be answered before Samsung and South Korea will even agree to any deal.
