World News @lemmygrad.ml afellowkid @lemmygrad.ml 1 yr. ago

US finalizes guardrails for chipmakers operating in China, posing dilemma for South Korean firms

english.hani.co.kr /arti/english_edition/e_business/1110028.html

Excerpts:

Based on this development, Samsung Electronics and SK Hynix will inevitably have to modify their strategy despite having invested trillions of won to build factories in China

The US government ultimately did not accept the requests of Seoul and South Korean corporations to ease the guardrails for the CHIPS and Science Act, which have the potential to worsen the competitive edge of South Korean chip factories operating in China, restricting production capacity expansion in China in the next 10 years to 5% as originally outlined.

The US Department of Commerce’s finalized guardrails for the CHIPS and Science Act included measures that would allow the US to “claw back” incentives granted if recipients expand production capacity above approved standards in “foreign countries of concern,” including China.

It appears likely that these investment restrictions will prolong uncertainty about the competitiveness of Samsung and SK Hynix factories in China.

5 comments

Critical support for Usonian policies to deindustrialize vassal States.
as much as it pains me to have to pay more for my PC parts we love to see a chaebol take an L
I'm wondering how US and a USian law gets to have a say in what a Korean corporation can or can't do. What is the way in which US is involved in Samsung's chip manufacturing pipeline?
- As far as I understand, it's subsidies in this case. US will subsidize elements of the Korean corporation's production as long as they build factories in the US but the benefits will be taken away if they have over the specified amount of production going on in China. And the amount they specify for that basically amounts to not allowing them to make any more factories in China and not letting their existing ones be highly productive.
  
  Here's an older article about it: "South Korean companies that invested in the US to build semiconductor factories will have to limit their manufacturing capacity at their Chinese factories to 5 percent or less for 10 years in order to receive US subsidies. [...] The excessive information demanded as a condition to receive subsidies from the US, runs the risk that South Korea’s advanced semiconductor technology and business secrets could be leaked. There is even one clause that requires the return of certain subsidies if companies earn more than a certain amount in profits."
  
  Thanks a lot