“South Korea asks US to relax”

South Korea has asked Washington to review its new semiconductor subsidy standards, hoping to ease US restrictions on semiconductor companies expanding production capacity in China, according to a US government document, Reuters and Yonhap reported Tuesday. The Yonhap news agency said that after the U.S. Department of Commerce announced the “guardrail” provisions of the Chip Act on March 21, various parties raised their opinions on the issue.

The Chip and Science Act, enacted last August, provides $552 billion in direct grants, federal loans and loan guarantees to build semiconductor research and manufacturing capacity in the United States. According to the “guardrail” of the US Chip Act released by the US Department of Commerce on March 21 this year, companies that have received subsidies will be required to refund the subsidies in full when they enter into major deals such as expanding semiconductor capacity in some countries including China in the next 10 years.

South Korea, a leading country in chip manufacturing and a major investor in the US chip industry, asked the US to review rules that prevent companies receiving US subsidies from building new facilities in countries such as China that exceed existing capacity by 5 per cent, Reuters said. “The guardrail rule should not be implemented in a way that places an unreasonable burden on companies investing in the United States,” Seoul said. No further details were given in the document, the report said, but Yonhap news agency reported Seoul had requested that the limit be raised to 10 percent.

Meanwhile, Yonhap News Agency reported that the Korean government had several rounds of discussions with the domestic chip industry before submitting the opinion to the U.S. government, which is believed to convey the terms of the Korea Semiconductor Industry Association’s request to the U.S. government. The request is aimed at allowing leading Korean semiconductor companies such as Samsung and SK to expand semiconductor production in China while receiving subsidies from the United States.

Yonhap also said that after the U.S. Department of Commerce announced the “guardrail” provisions of the Chip Act on March 21, various parties have made comments on the matter.

Chinese Foreign Ministry spokesperson Wang Wenbin said on March 22 that the so-called “guardrail” by the US side is a complete technological blockade and protectionism. In order to maintain its hegemony, the United States has constantly extended the concept of national security, abused export control measures, and even at the expense of its Allies, coerced some countries to contain China, and artificially promoted industrial decoupling and chain cutting. This seriously violates the law of market economy and the principle of fair competition, and seriously hinders world economic recovery and development. We are firmly opposed to this and have lodged solemn representations with the US side on many occasions. China will continue to firmly safeguard the legitimate rights and interests of Chinese companies.