According to a public filing in the United States, South Korea has asked Washington to reconsider its criteria for new semiconductor subsidies in light of China’s chip investment restrictions.
In March, the United States Commerce Department proposed rules to deny China and other countries access to $52 billion in CHIPS Act funds for semiconductor manufacturing and research.
South Korea, a major chipmaker and investor in the US chip sector, has asked the US to reconsider the rule that prohibits recipients of US funding from expanding their operations in such countries beyond 5% of existing capacity.
“The Republic of Korea believes that ‘guardrail provisions’ should not be implemented in a manner that imposes an unreasonable burden on companies investing in the United States,” South Korea stated in its official name.
The filing did not specify, but according to Yonhap, Seoul requested a 10% increase.
The US claims that the incentives will reestablish America’s leadership in semiconductor manufacturing, boost employment, and ensure economic and national security.
The world’s top memory chip manufacturers, Samsung and SK Hynix, have invested billions of dollars in Chinese chip factories.
Samsung may invest $25 billion in a chip plant in Texas.
According to a filing, Samsung Electronics Co Ltd requested clarification of the proposed rule to ensure that U.S. chip-making investments were “not unduly and unintentionally restricted.”
SK Hynix Inc. also commented, but without providing any specifics.
Its parent company, SK Group, is considering applying for funding to invest $15 billion in the chip sector in the United States, including an advanced chip packaging factory.
“Potential CHIPS Act funding recipients have numerous existing legacy facilities in China,” according to the Semiconductor Industry Association.
“These companies must keep these facilities commercially viable in order to protect their investments.
The United Auto Workers (UAW) union believes that applicants for funding should be disqualified if they refuse to join a union.
“The U.S. government should not be in the business of funding union-busting employers,” it said in a filing on Tuesday.
The Commerce Department accepted subsidy applications for cutting-edge chip facilities in March. On June 26, “current-generation, mature-node, and back-end” production facilities can apply.
