By Soo-hyang Choi
South Korea has asked the United States to review its criteria for new semiconductor subsidies, concerned over the impact of rules to limit chip investment in countries such as China. The U.S. Commerce Department proposed rules to prevent China and other countries it deems to be of concern from tapping funds of $52 billion earmarked for semiconductor manufacturing and research under the CHIPS Act.
South Korea asked the U.S. to review the rule that prevents recipients of U.S. funding from building new facilities in such countries, beyond 5% of existing capacity. Samsung Electronics Co Ltd and SK Hynix Inc, the world’s top two makers of memory chips, have invested billions of dollars in chip factories in China.
The United States has said the incentives aim to help restore America’s leadership in semiconductor manufacturing, boost employment and ensure economic and national security. The United Auto Workers (UAW) union has said funding applicants should be ruled ineligible if they did not agree to allow union organising.
The Commerce Department began accepting subsidy applications for leading-edge chip facilities in March. On June 26, it will open applications for “current-generation, mature-node and back-end” production facilities. South Korea’s industry ministry declined to comment on the matter.