Korean chipmakers set to win CHIPS Act grant by the end of March

Industry

Published: 13 Mar. 2024, 15:13 Updated: 13 Mar. 2024, 17:00

Korean chipmakers set to win CHIPS Act grant by the end of March

U.S. Secretary of Commerce Gina Raimondo attends a press conference at the Boeing Shanghai Aviation Services near the Shanghai Pudong International Airport, in Shanghai, China August 30, 2023. [REUTERS/YONHAP]

Korean chipmakers won't be excluded from U.S. subsidies under the CHIPS Act, according to top Korean official Tuesday.

"It is expected that the U.S. government will announce the subsidy plan for Korean companies soon," Cheong In-kyo, Korea's trade minister, was reported as saying to Yonhap News Agency in Washington, where he is to attend a U.S.-Korea Free Trade Agreement committee meeting.

"It is confirmed that Korean chipmakers will receive funding, but how much remains to be seen. The amount is expected to be announced by the end of March."

Samsung Electronics, along with TSMC and Intel, are waiting in line to be granted CHIPS Act subsidies. The Korean chip giant is building a $17 billion chip fabrication plant in Taylor, Texas which is expected to start operations by the end of this year.

An announcement on subsidies for Intel and TSMC was speculated to be imminent, but not for Samsung, raising concerns that the Korean chipmaker's turn may have been pushed back due to fierce competition for the funds. U.S. Commerce Secretary Gina Raimondo had said in February that the chipmakers are collectively seeking $70 billion in federal subsidies but only $28 billion has been set aside for advanced chipmaking facilities.

Korea's Trade Minister Cheong In-kyo is seen at the Dulles International Airport in Washington D.C. on Tuesday. [YONHAP]

"There is a set guideline by the U.S. about the fund size," Cheong said. "The subsidies are being distributed based on that standard so it is hard to preemptively determine whether there are disadvantages for Korean companies."

Regarding the latest report on Korean memory chipmakers Samsung Electronics and SK hynix suspending sales of old chip manufacturing equipment to China under apparent pressure from the United States, Cheong said, "Korean companies are responding in their own ways to the U.S. policies, which has significant implications for Korean policies as well."

SK hynix had also announced a $15 billion advanced packaging plant in the United States, the location of which has not yet been confirmed. Previous reports said the company is mulling Indiana as a possibility.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]