South Korea Says U.S. Chips Act Subsidies Have Too Many Requirements

Trade ministry says ‘unusual conditions’ will make investment in U.S. difficult

Wall Street Journal (Wednesday, March 8, 2023) by Jiyoung Sohn

SEOUL—The U.S. Chips Act is dangling billions of dollars in subsidies in front of the world’s biggest semiconductor manufacturers, but South Korea says there are too many strings attached.

SK Group of South Korea has pledged a $15 billion U.S. investment that includes semiconductor R & D  PHOTO: SEONGJOON CHO/BLOOMBERG NEWS

The conditions for receiving the subsidies unveiled last week are putting two of South Korea’s biggest chip makers—Samsung Electronics Co. SSNHZ 0.00%increase; green up pointing triangle and SK Hynix Inc.—in 000660 -2.36%decrease; red down pointing triangle a difficult position as they decide whether to apply for the federal funding, government officials and industry analysts said.

South Korea’s minister of trade, industry and energy described the requirements under the $53 billion chip subsidy program as vast and unconventional. Asking firms to submit information about their management and technology could expose them to business risks, the official, Lee Chang-yang, said Monday. The demand that companies offer child care for employees, together with rising interest rates and inflation, would drive up the already high cost of investing in the U.S., he said.

“There are many unusual conditions that are completely different from the subsidies we generally provide for foreign investment,” said Mr. Lee. He said South Korean officials were discussing those terms with their U.S. counterparts.

Samsung and SK Hynix would also face new restrictions on expanding their chip production facilities based in China if they were to apply for the U.S. chip subsidies.

South Korea’s trade minister, Ahn Duk-geun, will be in Washington, D.C., this week to meet with high-level U.S. government officials, the Ministry of Trade, Industry and Energy said Tuesday. The ministry said it would make the same points in Washington that Mr. Lee outlined in his remarks and stress that if the U.S. wants to stabilize and advance its semiconductor supply chain, it will need the cooperation of South Korean companies.

The U.S. has said many of the requirements in the program are intended to safeguard taxpayer investments and give awards based on rigorous financial analysis and due diligence. “We are not writing blank checks to any company that asks,” Commerce Secretary Gina Raimondo said last week.

The U.S. is seeking to attract more chip production facilities, with the goal of creating at least two manufacturing clusters for cutting-edge semiconductors by 2030, according to the Commerce Department. 

In addition to Samsung and SK Hynix, top candidates for the subsidy program include Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, and Intel Corp. Samsung and SK Hynix said they are reviewing the terms and declined to comment further. TSMC declined to comment. Intel has said the Chips Act would make American companies more competitive and restore global balance in the chip making industry.

Samsung and SK Hynix are the world’s two largest memory chip makers. Samsung is building a $17 billion contract chip-making factory for producing cutting-edge semiconductors in Taylor, Texas. SK Group, the owner of SK Hynix, pledged last year to invest $15 billion in semiconductor research and development and facilities for advanced packaging in the U.S. 

TikTok Endgame Against the Time-Clock

______Assessing China / The TEA Collaborative______

Volume 2, Number 4 in Global TECHtonics: U.S./China Fault-line series


The weekend’s big development in the technology arena is Beijing’s eleventh-hour move to alter the timing and trajectory of the sale of TikTok’s U.S. operation.

We touched on the Trump Administration’s August moves against TikTok’s parent Bytedance in the U.S./China De-Coupling: 4 Levels of Risk post two weeks ago.  On August 6th, President Trump signed two executive orders which started a 45-day time-clock involving two Chinese companies with hugely popular social media apps – ByteDance (owner of TikTok) and Tencent (owner of WeChat).  According to those orders, U.S. citizens and businesses would be barred, once the 45-day period expired, from any transaction involving the company and/or its products.  On August 14th, the Trump Administration modified the order as far as it affected TikTok by putting a new order in place, giving TikTok 90-days within which…

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Fiddling Around with U.S.-China Tech

______Assessing China / The TEA Collaborative______

Volume 2, Number 3 in Global TECHtonics: U.S./China Fault-line series

A U.S.-led initiative to reach out to China and to welcome it into the community of Western nations began with President Nixon trip to Beijing in February 1972.  Orchestrated by Henry Kissinger, Nixon’s National Security Advisor at the time, the trip was a brilliant Cold War gambit to exploit the growing rift between Moscow and Beijing. The trip kicked off a seven-year process of “normalizing” relations between the West and “the sleeping dragon” of Asia and, in so doing, divided the Soviet bloc. Through almost half-a-century and a bipartisan succession of Presidents, the effort to engage with China continued as that country woke from its Cultural Revolution nightmare and began to rise up, shaking the world as it did so.

February 1972 was the Year of the Rat (Water Element) in the Chinese zodiac.  Forty-eight years later we are again…

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The COVID-19 / Climate Change Nexus – – – – 10 Key Impacts

______Assessing China / The TEA Collaborative______

The COVID-19 pandemic holds lots of lessons for addressing the climate change challenge.  I’ll tackle the knottiest set of lessions — those concerning differing global responses, U.S. partisan cleavages, the psychology of risk and individual choice, and the ethics — in an upcoming post.

For now, I will simply set out a list of ten major impacts which the COVID-19 pandemic has brought to the climate change mitigation effort.  Four negative, four positive, and two ‘the jury is out.’



The impacts of COVID-19 — reducing mobility, leading to job cuts, and diverting world attention — have made the work of guarding against poaching, illegal logging and other threats to protected areas much more difficult to accomplish. Endangered specie and protected areas are suffering as a direct consequence.  Possibly, enhanced satellite surveillance and monitoring may be put to greater use in the…

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When In Rome …

______Assessing China / The TEA Collaborative______


Bear with me. I’m going to kick off today’s post with a snapshot about how we organize the blog’s content week by week in order to set the stage for then revealing the slight wrinkle with today’s post. Boring. Hang in there, though … there’s a good reason.

The TEA Collaborative produces three blog-posts per week: on Mondays (aspirationally, at least) we put out a tech-related post which takes care of the T in our name; on Wednesdays (ditto) an energy/environment post which covers the letter E; and on Fridays (ditto) an A post for Ambitions (by which we mean the effort to chronicle the seventy-year undertaking by the government of the People’s Republic of China to leverage their huge population, along with other assets, to confront the world with a new, ambitious model of change at vast scale and speed).

So as not to get trapped into rigidity, we…

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