South Korean companies are rebelling against the chip law

Europe and the United States have taken a similar step Promote the semiconductor industry reduce its current dependence on Asia. At the beginning of February 2022, Ursula von der Leyen, President of the European Commission, announced that the Old Continent would allocate 43,000 million euros to the chip industry (this figure includes both public and private investment). For its part, the United States approved the “Chips and Science Act” program in July 2022, which plans to allocate $ 52 thousand million for this same purpose.

However, his starting point is completely different. The US has a large number of semiconductor plants, and some of them, like the one owned by Intel in Oregon or Arizona, the one owned by TSMC in Washington or the one owned by Samsung in Texas, are state-of-the-art. The European integrated circuit industry is much less developed, so it clearly has a long way to go to reach its goal: to manufacture 20% of the chips that will be produced worldwide by 2030.

The US also credits the fact that Intel, TSMC, and Samsung are some of the companies that are already building state-of-the-art semiconductor plants within their borders. It is clear that the administration is led by Joe Biden She has an ambitious plan in hand, but he just stumbled upon a problem complicating his view, and one he certainly didn’t count on: South Korean semiconductor manufacturers didn’t seem willing to accept his terms. They consider them offensive.

Samsung and SK Hynix, on the right track

The strategy implemented by the United States to strengthen the semiconductor industry seeks to attract investment and develop the business fabric within its borders. However, the money raised by the Chips and Science Act isn’t just for American companies; Foreign companies operating in the chip sector can also participate in this initiative. In fact, some, like South Korea’s Samsung and SK Hynix, have already taken the necessary steps to do so.

Samsung has invested $17,000 million in developing a state-of-the-art semiconductor plant that is already being built in Taylor (Texas). If all goes well, it will be able to start manufacturing chips by the end of 2024. SK Hynix, one of the largest manufacturers of memory ICs and CMOS sensors on the planet, plans to build an advanced semiconductor packaging plant in the United States. In principle, these two companies meet the requirements set forth by the US government to be able to Access to financial support who proposes the “Chips and Science Act” programme.

However, and here comes an unexpected turn of events, it is likely that neither Samsung nor SK Hynix will finally join this plan. On March 27, the US Department of Commerce detailed conditions that must be met by companies wishing to take advantage of this program, and one of those clauses requires them to submit projections of their profitability with a view to forfeiting excess profits if they finally do so. came to happen. In addition, these companies are required to hand over Excel sheets detailing their accounts so that management can check in advance whether they have been done correctly.

but this is not all. Another requirement imposed by the US government forces companies to communicate their manufacturing capacity to their factories, categorized by chip type, annual production volume or sales price during the first year of manufacture, among other variables. According to the newspaper bisenscoria Samsung and SK Hynix They are not willing to accept these terms. These South Korean companies argue that if they provide all the information required by the administration, their competitiveness may suffer, and American companies will have the opportunity to take advantage of this circumstance. They have to negotiate. We’ll see who finally gives up.

Cover Photo: TSMC

via: bisenscoria

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