Trade minister leaves for U.S. for talks on Chips Act

All News 10:20 March 08, 2023

SEOUL, March 8 (Yonhap) -- South Korea's trade chief left for the United States on Wednesday for talks amid growing concerns over the adverse impact of the U.S. Chips Act on South Korean chipmakers.

During his three-day trip through Friday, Trade Minister Ahn Duk-geun plans to meet senior officials of the U.S. Commerce Department and the White House, as well as officials from major think tanks, to discuss the Chips and Science Act that calls for subsidies of US$52.7 billion and tax incentives for foreign chipmakers to set up factories in the U.S.

The program came with a number of major strings attached, such as requiring companies receiving subsidies to share excess profits, submit data on their cash flows and profitability, and provide child care for workers.

"South Korea will make points that the conditions would deepen business uncertainties, violate companies' own technology and management rights, and make the U.S. less attractive as an investment destination," the ministry said, stressing that South Korean companies' "normal operation" is needed to ensure supply chains of global semiconductors.

"We will support companies in their negotiations with the U.S. government over detailed terms for the funding," it added.

Under the "guardrails" to be announced soon, companies receiving subsidies will be banned from making investments in chips in China for a decade.

Samsung Electronics Co. and SK hynix Inc., the world's two largest memory chip makers, have significant semiconductor manufacturing operations in China.

On Tuesday, Ahn held disclosed meetings with Samsung and SK hynix officials for consultations on their response to the issue, ministry officials said.

Industry Minister Lee Chang-yang earlier said that the act has "quite a number of unconventional conditions" and vowed active consultations with Washington to resolve related concerns.