The Donald Trump administration has recently faced strong criticism from major U.S. media for acquiring a 10% equity stake in American semiconductor corporation Intel, calling it a 'mistake.'
The Washington Post (WP) reported on the 22nd (local time) in an editorial titled 'The Intel deal is a mistake' that 'the U.S. should not try to win over China by becoming like China,' describing it as a government misjudgment. WP noted, 'We must compete based on the approach we have always taken, the free market system, which has been the most effective method that has brought us great results for a long time.'
The media outlet stated regarding Intel, 'The once-dominant national corporation is now a decrepit also-ran, falling behind in its main markets.' It pointed out that 'American taxpayers will have to pour in nearly $9 billion (about 12.5 trillion won) to make this transaction happen, but what they will get in return is an equity stake in a company that has consistently failed to pursue business opportunities properly and has missed strategic chances over the past few years.'
WP assessed that it is questionable whether Intel, which has fallen behind in mobile computing and artificial intelligence (AI), can recover its past glory with the government's large-scale support.
It also pointed out that this acquisition of equity in Intel and the recent agreement by the Trump administration to take 15% of the sales from Nvidia's and AMD's exports to China are both 'bad precedents.' This is because there is a significant risk of distorting the free market system. WP added that the free market system has brought great results for the U.S. and other free-market countries, stating it is more effective than state capitalism or communist and socialist systems.
WP noted that while there is an argument that industrial policies supporting corporations should be pursued for national strategic industries, such policies can only succeed if they meet strict conditions, pointing out that China, which invested massive funds in specific corporations and industries, has only achieved limited success.
For instance, while China has made significant achievements in the electric vehicle sector thanks to policy support, it has failed in the real estate sector, creating a large number of unsold vacant homes. It was explained that such policies have led labor and capital to flow to unnecessary areas, hindering economic growth and increasing the number of 'zombie corporations' without a chance of revival.
WP suggested that 'to secure the supply chain, there is a better method than providing subsidies to struggling corporations, hoping that they will eventually overcome their difficulties,' recommending the implementation of 'friend-shoring' (restructuring the supply chain based on friendly countries).
Nikki Haley, a former U.S. ambassador to the United Nations who competed against President Trump in the Republican primary during the last presidential election, also criticized the government's acquisition of Intel equity on social media platform X on the 23rd, stating it would become a 'demonstration case of what should not be done.'
Previously, the Trump administration acquired an equity stake in Intel in exchange for providing subsidies to the company, making the U.S. government the largest shareholder of Intel. Previously, the largest shareholder of Intel had been BlackRock, an American asset management company, holding 8.92% of the equity. Following the agreement to receive 15% of Nvidia's sales to China, U.S. media analyzed Trump's unprecedented corporate management intervention, likening it to state-led capitalism.
The U.S. government, in accordance with the CHIPS Act (Creating Helpful Incentives to Produce Semiconductors), which was established to nurture the domestic semiconductor industry, provided subsidies to Intel while obtaining a 10% equity stake as a form of quid pro quo. This issue could also affect corporations like Samsung Electronics and Taiwan Semiconductor Manufacturing Company (TSMC), which are expected to receive subsidies while investing in semiconductor facilities in the U.S.