“Due to the uncertainty of subsidy payment standards,
It could lead to an increase in investment costs in the US.”
U.S. “Close consultations with the Korean government and companies”
On the 9th (local time), Ahn Deok-geun, head of the Ministry of Trade, Industry and Energy’s Trade Negotiation Headquarters (pictured), said, “It should not lead to deepening corporate uncertainty, excessive management intervention, and an increase in investment costs by Korean companies in the US regarding the subsidy payment standards of the US Semiconductor Support Act, which is controversial. We actively raised the issue with the US side.”
Headquarters Ahn met with Washington correspondents and related to the Notice of Support (NOFO) that contains the subsidy application process and screening criteria for semiconductor investment companies, “Uncertainty in subsidy payment standards affects Korean companies’ investment in the US and Korea-US semiconductor supply chain cooperation. I emphasized that it is not desirable,” he said. Regarding the ‘guardrail’ (restriction on investment in China) regulations that could affect Samsung Electronics and SK Hynix, which have production facilities in China, he also said, “We requested that companies do not have problems operating their factories in China.” He emphasized that there should be no negative impact on semiconductor supply and demand.”
The US side said, “Korea is one of the most important partners in semiconductor field cooperation,” and announced that it would consult closely with the Korean government and companies, said Ahn.
The standards for subsidy payment under the US Semiconductor Act are conditional on sharing excess profits, restricting investment in China, allowing access to semiconductor factories by the US Department of Defense, and submitting detailed financial plans and production information. Criticism is growing.
A high-ranking government official said, in particular, about the ‘excess profit sharing’ clause, “it is an unprecedented level that does not meet international standards. This official also said, “I received a confirmation from the US side that it would clarify a significant part in the process of signing the agreement between the company and the Ministry of Commerce.”
Meanwhile, Director Ahn again requested that the position of the Korean government and industry be reflected in the detailed standards for battery parts and core minerals of the US Inflation Reduction Act (IRA), which will be announced this month. It was reported that a Korean company emphasized that it should be able to secure the necessary amount of steel as much as possible.
