Money Today Reporter Han Ji-yeon, Sejong = Reporter Cho Gyu-hee, Sejong = Reporter Yoo Seon-il | 2023.03.01 16:09
As the US government announced the screening criteria for the payment of production subsidies under the Semiconductor Support Act (CHIPS Act), domestic semiconductor companies fell into trouble over paying back. This is because the United States put forward strict conditions that are difficult for a private company to accept, such as sharing excess profits, saying that it puts national security interests first.
Regarding this issue, the Ministry of Trade, Industry and Energy announced that it would be difficult to respond directly at the government level, but that it would continue discussions by continuously listening to the voices of the industry. In addition, considering that the details of the ‘guardrail clause’ to be disclosed by the US in the future will have the greatest impact on domestic companies, we decided to continue consultations with the US government to fully reflect our position.
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“Are you asking for a subsidy?”
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On the 28th of last month (local time), the US Department of Commerce announced detailed support plans for financial incentives for semiconductor manufacturing facilities among the incentive programs under the Semiconductor Support Act. As a follow-up to the Semiconductor Support Act, which stipulates US$52.7 billion in financial support and 25% investment tax credit for the semiconductor industry, the US announced the screening criteria for receiving financial support this time.
According to the detailed support plan, companies that receive subsidies of more than $150 million must share profits with the US government if they exceed their initial expectations and generate profits in excess of the agreed standard. The shared excess profits are used to strengthen the US semiconductor ecosystem. In addition, all companies applying for grants must present a local workforce development plan.
The domestic semiconductor industry seems to be puzzled by the fact that the standards are excessive than expected. Domestic companies such as Samsung Electronics and SK Hynix announced that they would decide whether or not to apply for subsidies after carefully interpreting and reviewing the detailed conditions.
The industry analyzed that the US government was somewhat excessively greedy in order to calm the public’s concerns about tax waste along with the expansion of the semiconductor supply chain. In addition, the point that subsidies should not be used for dividend payments and stock buybacks and that national security agencies such as the Department of Defense should be allowed access to cutting-edge semiconductors produced in the United States were also controversial.
It is also a problem that the exact standard for ‘excess profit’ has not yet been released. Companies wishing to apply for grants to the U.S. Department of Commerce must also submit a financial plan. Negotiations to set standards for excess profits inevitably put pressure on companies.
An official in the domestic semiconductor industry said, “Isn’t it not just building a factory with subsidies from the US government?” Criticized.
An official from the Ministry of Industry said, “The matter announced this time is a matter for the industry to decide first,” and said, “We will continue to consult and discuss with the industry.”
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“We will try to reflect the Korean position in the guardrail clause”
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The U.S. Department of Commerce also made clear a guardrail clause stating that companies that received subsidies must spit out all the money if they conduct joint research with concerned countries such as China. As a matter of fact, the US and China were pressured to do ‘either way’, so domestic companies with factories in China suffered from headaches.
Domestic companies are in a position to thoroughly analyze the payment conditions before the full-scale application submission period and bring them to the advantage of the company as much as possible. The Ministry of Commerce did not say that subsidies could be received only when all application criteria were met, but that they would give priority to payment, so they would discuss and negotiate several times during the application process.
Another industry insider said, “It is true that the US government has said that it will directly look into private companies. It is inconvenient. This is an issue that needs to be considered.” .
The Ministry of Trade, Industry and Energy said, “After discussing countermeasures with the industry on matters that may place excessive burden on our corporate management, such as the provisions of the guardrail, we have actively expressed our position to the relevant authorities, such as the US Department of Commerce.” “We will continue to consult with the relevant US authorities so that our company’s position can be sufficiently reflected in the process of preparing detailed regulations for guardrails,” he said.
[저작권자 @머니투데이, 무단전재 및 재배포 금지]
