South Korea asks US to review China rule for chip subsidies

SEOUL, May 24 (Reuters): South Korea has asked Washington to review its criteria for new semiconductor subsidies, concerned over the impact of rules to limit chip investment in countries such as China, a US public filing showed.
In March, the US commerce department proposed rules to prevent China and other countries it deems to be of concern from tapping funds of $52 billion earmarked for semiconductor manufacturing and research under the so-called CHIPS Act.
A leading chipmaker and major investor in the US chip sector, South Korea asked the United States to review the rule that prevents recipients of US funding from building new facilities in such countries, beyond 5 per cent of existing capacity.
"The Republic of Korea believes 'guardrail provisions' should not be implemented in a manner that imposes an unreasonable burden on companies investing in the United States," South Korea said, using its official name.
The filing gave no further details, but the South's Yonhap news agency said Seoul had asked to raise the limit to 10 per cent.
South Korea's industry ministry declined to comment.
The United States has said the incentives aim to help restore America's leadership in semiconductor manufacturing, boost employment and ensure economic and national security.
South Korea's Samsung and SK Hynix, the world's top two makers of memory chips, have invested billions of dollars in chip factories in China.
Samsung is building a chip plant in Texas that could cost more than $25 billion.
In its comments, Samsung Electronics Co Ltd (005930.KS) sought clarification of the proposed rule to ensure that investments in the US chip-making sector were "not unduly and unintentionally restricted," a filing showed.