Free U.S. money for chipmakers comes at a price

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Free U.S. money for chipmakers comes at a price

A semiconductor wafer displayed at Samsung Electronics' showroom in western Seoul [NEWS1]

A semiconductor wafer displayed at Samsung Electronics' showroom in western Seoul [NEWS1]

 
The United States will require companies to share excess profits and provide childcare programs in order to receive semiconductor manufacturing subsidies from the government.
 
On Tuesday, the U.S. Commerce Department released a notice of funding opportunities under a $3.9 billion manufacturing subsidy program. It is part of a Chips and Science Act $5.3 billion incentive funding program.
 
The application is open for the construction, expansion or modernization of commercial chip production facilities, according to the Commerce Department.
 
Applicants can submit a statement of interest from Tuesday. Chipmakers capable of producing NAND flash with 200 layers or more, or dynamic random-access memory (DRAM) chips with a half-pitch of 13 nanometers and below, can submit the full application starting March 31.
 
Evaluation criteria for the subsidy grant include the project’s potential impact on the U.S. chip production expansion, the viability of the investment plans and the company’s financial standing.
 
Recipients receiving more than $150 million in funding are required to “share with the U.S. government a portion of any cash flows or returns that exceed the applicant’s projections.”
 
Applicants requesting over $150 million need to come up with a plan to provide an accessible childcare facility for its employees and construction workers.
 
The U.S. Chips and Science Act, which was passed in July, offers subsidies and tax benefits for companies executing semiconductor-related investments in the country.
 
The “guardrails” in the Chips Act prohibit companies receiving subsidies under the act from making new investments in China for a decade. The specific rules for the guardrail provision are expected to be released in March.
 
The Ministry of Trade, Industry and Energy said in a statement on Wednesday that it “has been actively sharing the situation of Korean companies with the Commerce Department in relation to issues that may weigh heavily on the businesses, such as the guardrail provision.”
 
The ministry added that it “will continue to negotiate with the U.S. authorities to reflect the interest of Korean companies in establishing the details of the guardrail provisions.”
 
 
 

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]
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