Anchor: The U.S. government has finalized rules on semiconductor subsidies, restricting chip firms' manufacturing expansion in China by no more than five percent. This will also affect South Korea's Samsung Electronics and SK hynix which have production facilities in China.
Kim Soyon has more.
Report: The U.S. Department of Commerce on Friday announced finalized guardrails on the CHIPS Act that prohibit material expansion of semiconductor manufacturing capacity for advanced facilities in "foreign countries of concern" for ten years from the date of award.
In a press release, the department defined material expansion as increasing a facility's production capacity by "more than five percent."
This means that if chipmakers receive subsidies in the U.S., worth some 39 billion dollars, they cannot expand production capacity in China for high-tech chips by more than five percent and by ten percent for legacy facilities, with violators subject to paying back the full subsidy amount.
Industry officials and the Korean government had asked for a higher limit in the expansion curb noting concern the restriction could hinder necessary facility upgrades but their request has not been reflected.
But other requests have been reflected in the final guardrails including assessing production capacity by the annual number of wafers produced, instead of monthly.
The commerce department also removed an initially proposed one hundred-thousand dollar spending limit on investments in advanced capacity in China. Bloomberg said the removal came after an industry group of chipmakers, known as the Information Technology Industry Council whose member firms include Intel, TSMC and Samsung, expressed concern over the impact of such restrictions on future business operations.
The guardrails also ban subsidy recipients from engaging in joint research or technology licensing with Chinese firms blacklisted by the U.S. commerce and treasury departments such as Huawei and YMTC.
The commerce department said it held close consultations with South Korea, Japan, India and the UK in the implementation of the CHIPS Act and promised to further coordinate with allies and partners on strategies to protect economic and national security.
Kim Soyon, KBS World Radio News.