South Korea's Samsung, SK Hynix In A Dilemma Over US Chips Act As Terms Expose Them To Business Risks, Higher Costs

The conditions for receiving the U.S. Chips Act subsidies created apprehensions while applying for federal funding in two of South Korea’s biggest chipmakers, Samsung Electronics Co SSNLF and SK Hynix Inc.

• South Korea’s minister of trade, industry, and energy called out the requirements under the U.S. chip subsidy program as vast and unconventional, the Wall Street Journal reports.
• Asking firms to submit information about their management and technology could expose them to business risks, the official, Lee Chang-yang, said Monday.
• He added that the demand that companies offer child care for employees and rising interest rates and inflation would drive up the already high cost of investing in the U.S.
• “There are many unusual conditions that are completely different from the subsidies we generally provide for foreign investment,” said Mr. Lee.
• Samsung and SK Hynix would also face new restrictions on expanding their chip production facilities based in China if they were to apply for U.S. chip subsidies.
• South Korea’s trade minister, Ahn Duk-geun, proposes to flag the above points during his Washington, D.C. meeting with high-level U.S. government officials this week.
• “This so-called profit-sharing clause is essentially taking away what they gave” through the subsidies, said Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade.

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