The South Korean Ministry of Trade, Industry and Energy yesterday said that Washington’s proposed rules to prevent US$52 billion in chip funding from being used by “countries of concern” would not force recipients to shut down their factories in China.
The US Department of Commerce on Tuesday proposed limits for recipients of US chip manufacturing and research funding, including limits on investing in expansion in countries such as China and Russia.
The world’s largest and second-largest memorychip makers, Samsung Electronics Co and SK Hynix Inc, have chip production facilities in China.
Photo: REUTERS
Samsung is building a chip plant in Texas that could cost more than US$25 billion, while SK Hynix parent SK Group last year announced plans to invest US$15 billion in the US chip industry. Both might apply for funding.
The proposed rules for funding recipients limit chip production capacity growth in China to 5 percent over 10 years as measured by wafers, and 10 percent for older legacy chips, the South Korean trade ministry said.
They do not restrict investments in technology and process upgrades, or equipment replacement necessary for the operation of existing facilities, the ministry added.
“For production facilities our companies are operating in China, it is expected that maintenance and partial expansion as well as technology upgrades will continue to be possible,” the ministry said in a statement.
“As technology is upgraded, chips per wafer can be increased ... which could further expand production depending on corporate strategies,” it added.
The South Korean government is planning to communicate with the local industry, analyze proposed rules and consult with US counterparts within 60 days, the ministry said.
Uncertainty includes what happens when the one-year waiver for Samsung and SK Hynix to receive chip equipment needed in China expires in October, said an industry source, who declined to be named because of the sensitivity of the matter.
Samsung and SK Hynix said they would review the details of the announcement.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, which is investing US$40 billion in a new chip plant in Arizona and also manufactures in China, declined to comment on Washington’s announcement.
The ministry said that Samsung’s plan to invest US$230 billion in South Korea over 20 years to develop a large chipmaking base was in line with uncertainties in investing in China or the US.
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