Subscribe
E-Paper
 |
| U.S. President Joe Biden speaks at an event promoting the CHIPS for America Funding Opportunity, at Onondaga Community College in Syracuse, New York, in this October 2022 file photo. Reuters-Yonhap |
Biden's strings-attached financial aid makes building semiconductor plants in US less attractive
By Park Jae-hyuk
Samsung Electronics and SK hynix took a cautious stance toward the U.S. government's latest announcement on the specifics of the CHIPS for America Funding Opportunity, saying that it is too early for them to decide whether or not to apply for the subsidies.
Korean chipmakers have been worried about the fact that the U.S. incentive program includes rules that could endanger their global businesses, including their operations in China.
"We are reviewing the U.S. subsidy rules at this moment," a Samsung Electronics spokesperson said Thursday.
An SK hynix spokesperson declined to comment on the issue.
Their responses contradicted U.S. President Joe Biden's confident remarks that the subsidies will help encourage semiconductor investments in America. Biden said on Wednesday that he was told in Korea last year that Korean chipmakers invest in the U.S. because it has "the best workers in the world" and it is "the most secure investment" they can make.
"They're coming here because of who we are," Biden said. "We made it clear to folks: If you want to participate in the CHIPS program, you also have to provide childcare for your employees."
But a semiconductor industry official said on condition of anonymity, "It is difficult for individual companies to take a certain stance amid the ongoing trade war between the U.S. and China."
According to the U.S. Department of Commerce, recipients of more than $150 million in direct funding will be required to share with the U.S. government a portion of any cash flow or returns that exceed the applicant's projections by an agreed-upon threshold.
In addition, companies winning awards will be required to enter into agreements restricting their ability to expand semiconductor manufacturing capacities in China and other foreign countries of concern for 10 years after winning the funding.
Controversy has also erupted over allowing the U.S. Department of Defense and the national security community to have access to secure and cutting-edge logic chip manufacturing in a commercial production environment in the U.S.
"Even if chipmakers make profits from their investments in the U.S., they will face questions about sharing most of their earnings with the U.S. government," Meritz Securities analyst Kim Sun-woo said. "Samsung Electronics could have used the subsidy for its production of DRAM chips in the U.S., but the company will likely avoid producing highly-profitable products, considering its concerns over the possibility of disclosing its confidential information and returning its profits."
The analyst pointed out that disclosures of confidential information could be fatal to a semiconductor manufacturer, considering the importance of the technological gap with its rivals in the chip industry.
Against this backdrop, Taiwan's TSMC has remained lukewarm over the prospect of applying for the U.S. subsidy, according to Reuters and other foreign news outlets.
The Ministry of Trade, Industry and Energy said that the government will continue to talk with U.S. authorities to let them realize the concerns of Korean chipmakers over the new subsidy rules.
