Seoul: South Korea has asked Washington to review its criteria for new semiconductor subsidies concerned about the impact of rules limiting chip investment in countries such as China, a US public filing showed.
In March, the US Commerce Department proposed rules to block China and other countries from tapping $52 billion in funds earmarked for semiconductor manufacturing and research under the so-called CHIPS Act.
South Korea, a major chip maker and major investor in the US chip sector, asked the United States to review a rule that prevents recipients of US funding from building new facilities in such countries over 5% of existing capacity Is.
South Korea, using its official name, said, “The Republic of Korea believes that the ‘railing provisions’ should not be implemented in a way that places an undue burden on companies investing in the United States.”
The filing gave no further details, but the South’s Yonhap news agency said Seoul had asked to raise the limit to 10%.
South Korea’s Ministry of Industry declined to comment.
The United States has stated that the stimulus is intended to help restore America’s leadership in semiconductor manufacturing, boost employment, and ensure economic and national security.
South Korea’s Samsung and SK Hynix, the world’s top two makers of memory chips, have invested billions of dollars in chip factories in China.
Samsung is building a chip plant in Texas that could cost more than $25 billion.
In its comments, Samsung Electronics Co Ltd sought clarification of the proposed rule to ensure that investments in the US chip-making sector were not “unfairly and unconscionably restricted”, a filing showed.
SK Hynix Inc also made comments, but the public release did not provide any details.
Its parent SK Group, which plans to invest $15 billion in the US chip sector, some for an advanced chip packaging factory, has said it is considering applying for funding.
“Potential Chips Act funding recipients have many existing legacy facilities in China,” said the Semiconductor Industry Association, an industry group.
“It is important for these companies to be able to protect their past investments in these facilities while remaining commercially viable.”
SK Hynix and Samsung Electronics did not immediately provide comment to Reuters.
The United Auto Workers (UAW) union has said that funding applicants should be considered ineligible if they do not agree to allow the union to organize.
“The US government should not be in the business of funding union-busting employers,” it said in a filing Tuesday.
The Commerce Department began accepting subsidy applications for state-of-the-art chip facilities in March. On June 26, it will open applications for “current-generation, mature-node and back-end” production facilities.
(Reporting by Soo-Hyang Choi in Seoul and David Shepperson in Washington; Editing by Ed Davis and Clarence Fernandez)
Disclaimer: This report is generated automatically from Reuters news service. ThePrint is not responsible for its content.