U.S. CHIPS and Science Act to be Detailed Soon

Details on the U.S. CHIPS and Science Act are scheduled to be announced this month. The details are likely to include a 10-year ban on investment in China to be applied to semiconductor companies supported by the U.S. government. This is likely to affect both Samsung Electronics and SK Hynix, which are running manufacturing facilities in China.

U.S. President Joe Biden signed the act in August last year. According to it, the U.S. government will provide various tax benefits and subsidies of US$52.7 billion for semiconductor companies investing in the United States and the beneficiaries will be subject to the ban.

At present, Samsung Electronics has a NAND flash plant in Xi’an and SK Hynix is producing DRAMs in Wuxi. Their products produced there account for more than 40 percent of their output. At the same time, in step with the act, Samsung Electronics is building a foundry plant in Taylor, Texas and SK Hynix is considering building a packaging plant in the United States.

In October last year, the U.S. government implemented a ban on semiconductor equipment export to China separately from the act. At that time, it gave a grace period of one year to Samsung Electronics and SK Hynix.