US "Expect partial semiconductor support to be executed by next spring... Recovery if investment in China violates regulations"

Gina Raimondo, U.S. Secretary of Commerce
[Photo by Reuters]

[Asia Economy Reporter Jeong Hyunjin] On the 6th (local time), the U.S. Department of Commerce announced that it is expected to disburse subsidies as early as next spring based on the 'Chips and Science Act' (Chips and Science Act·Semiconductor Support Act), which was created last month to support securing semiconductor production facilities within the United States. Regarding the important investment in China for Korean semiconductor companies, it reiterated, "Companies receiving support cannot build advanced process facilities in China for 10 years."

According to Bloomberg News and others, U.S. Secretary of Commerce Gina Raimondo said at a White House briefing that the department plans to accept subsidy applications from companies before February next year to implement the Semiconductor Support Act, adding, "We hope to provide subsidies to some companies by next spring." This is the first detailed disclosure of the implementation plan one month after President Joe Biden signed the Semiconductor Support Act on the 9th of last month.

The law includes a total investment of $280 billion (approximately 366 trillion KRW) to support the development of the U.S. semiconductor industry and maintain technological superiority, including $39 billion to support the construction of semiconductor facilities within the U.S. Among these, regarding the support for semiconductor facility construction that semiconductor companies are most focused on, the U.S. Department of Commerce explained that about $28 billion will be used to support domestic production of advanced logic semiconductors and memory semiconductors required for precise manufacturing processes, and about $10 billion will be used to support the expansion of mature process semiconductor production facilities used in automobiles, military, and medical devices.

Secretary Raimondo said that detailed application guidelines related to this will be announced in early February next year, and a group of about 50 experts to be announced soon will review them. She emphasized, "We want to negotiate each deal individually. Companies must prove whether the subsidy is necessary for production."

Regarding the restriction on investment in China, which Korean semiconductor companies are most concerned about, she said, "Companies receiving funds cannot build advanced process facilities in China for the next 10 years," adding, "They can only expand mature process factories within China for the Chinese market." Secretary Raimondo explained that only the production of inexpensive semiconductors at the mature process level used in computer monitors or automobiles is possible, and added, "If a company receives support and exceeds this, the funds will be reclaimed."

The U.S. Semiconductor Support Act includes a provision that companies receiving subsidies from the U.S. government cannot invest in advanced facilities in Chinese factories for 10 years. Specifically, in the semiconductor foundry (contract manufacturing) sector, new investments below 28 nm (nanometers) are prohibited in China.

This content was produced with the assistance of AI translation services.