The Seoul government has reacted to Washington's finalized guardrails on its CHIPS Act, saying the measures will guarantee normal business activities of South Korean firms that operate semiconductor facilities in China and pose no security concerns.

In a press release Friday, the Ministry of Trade, Industry and Energy gave the assessment while vowing to continue cooperation with the U.S. to strengthen chip supply chains and guarantee South Korean firms' investment and business activities. 

The ministry said it will deal with the scale of incentives and guardrail provisions under the CHIPS Act based on each company's global business strategy.

It said the finalized rules reflect some progress from the draft version unveiled in March thanks to continued talks held between the two sides.

Under the guardrails, chipmakers receiving subsidies in the U.S. cannot expand production capacity in China for high-tech chips by more than five percent, while Seoul has asked for a ten percent curb. 

However, notably, the U.S. removed an initially proposed one hundred-thousand dollar spending limit on investments in advanced capacity in China which is expected to be an advantage to Samsung Electronics and SK hynix.