South Korea’s trade minister to raise concerns over Chips Act in US meetings

South Korea’s commerce minister Ahn Duk-geun will meet with counterparts in Washington this week to specific issues that the US Chips Act may make the US a much less engaging funding vacation spot, the nation’s commerce ministry mentioned.

During his journey, South Korea’s commerce minister plans to satisfy senior officers from the US Commerce Department and White House in addition to officers from main assume tanks to debate the Chips Act.

The Biden administration final month mentioned it will require corporations profitable $52.7 billion of obtainable funds from the Chips Act to share extra income and clarify how they plan to supply reasonably priced childcare.

The Chips Act performs a central function within the Biden administration’s effort to carry semiconductor manufacturing residence, and its success is significant to US ambitions to maintain forward of China in world markets.

While the incentives are essential for chipmakers’s funding selections, a number of the situations for receiving the subsidies are placing South Korean chipmakers Samsung Electronics Co Ltd and SK Hynix Inc in a tough place as they determine whether or not to use for funding, South Korean authorities officers mentioned.

“The South Korean government will make it clear that the conditions of the Chips Act could deepen business uncertainties, violate companies’ management and technology rights as well as make the United States less attractive as an investment option,” South Korea’s commerce ministry mentioned.

Under the Chips Act, corporations that settle for the incentives are required to share with the US authorities a portion of their income that exceed preliminary projections by an agreed-upon threshold. Companies profitable chips subsidies could be barred from partaking in joint analysis and know-how licensing efforts or increasing semiconductor manufacturing capability in overseas international locations of concern like China for 10 years. Both Samsung Electronics and SK Hynix function chip factories in China.

Chipmakers are additionally involved about necessities to show over details about revenue projections and operations, as a result of they’re thought of commerce secrets and techniques, analysts mentioned.

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