Drawing Attention
As the U.S. government announced that more than 200 companies have shown intentions to apply for subsidies under the CHIPS Act, attention is focused on the movements of Korean companies such as Samsung Electronics and SK Hynix. In February, the U.S. Department of Commerce unveiled an application process for semiconductor production subsidies, telling companies to submit statements of intent (SOI) at least 21 days before submitting an application.
On April 18, Samsung Electronics and SK Hynix said they would not confirm whether or not they had submitted SOIs. “As the SOI submission stage is currently underway and no application deadline has been set, it is expected that the two companies will continue marathon negotiations with the U.S. government,” said a semiconductor industry insider who wished to remain anonymous. “In the case of SK Hynix, the scale of its U.S. business has not been finalized, so SK Hynix does not need to rush.”
Earlier, U.S. CHIPS Act Program authorities said that more than 200 semiconductor companies from 35 states had submitted SOIs by April 14. “More than 200 companies have expressed interest in applying for CHIPS Act grants,” U.S. Commerce Secretary Gina Rumondo said in a CNBC interview on the same day, “But they have not yet entered the application process.”
The U.S. government did not release a list of companies that submitted SOIs, but said they span the entire semiconductor ecosystem. More than half are for manufacturing facilities, including leading-edge and legacy processes and packaging. The rest are related to semiconductor materials, components, and equipment domains and research and development (R&D) facilities.
The U.S. CHIPS Act Program authorities have been accepting applications from companies wishing to build advanced semiconductor fabs since March 31 while applications for rear-end process facilities for legacy processes and packaging and others will be accepted beginning June 26. The letter of intent, which must be submitted before the application is accepted, requires companies to detail the sizes, locations, and capacities of plants to be subsidized, products to be produced, the timing and amount of investment, and expected customers.
On the other hand, the Semiconductor Law Program authorities said that the issue of excess profit sharing, which has been cited as a big problem of subsidies, is not intended to regulate corporate profits. They added that it is only applicable to cases where there are excessive profits compared to projections, so the possibility of actually triggering it is very small.
In response to the criticism that the requirements for subsidies, such as requiring companies to provide childcare facilities, are too much, they said, “The success of TSMC, Samsung, etc. was due to labor productivity. Providing childcare services will allow a wider range of workers to enter the semiconductor industry.” They added that restrictions on stock buybacks are meant to ensure continued investment in the U.S. semiconductor industry.