The U.S. Department of Commerce stated on the 21st that the details of the "guardrail" clause in the "Chip Act" to prevent subsidies from being used to harm U.S. security activities have been gazetted and public comments are being sought for 60 days. However, the increase in storage capacity per unit wafer area brought about by technological progress is not regarded as an increase in production capacity, leaving a way out for Korean companies in China to compete with local Chinese friends. However, the U.S. government reiterated that joint research and experimental development activities between beneficiary companies and Chinese companies such as Huawei are prohibited.
The bill stipulates that when companies receiving subsidies conduct major transactions that enable "material expansion" (material expansion) of production capacity in China and other countries of concern in the next 10 years, the subsidies must be fully refunded. The rules define "substantial expansion" as a quantitative increase in production capacity, and define the amount of "major transactions" as more than US$100,000. At the same time, companies that receive subsidies are prohibited from increasing their factory production capacity by 5% in China.
In addition to China, Russia, Iran and North Korea will also be subject to the same restrictions. U.S. Secretary of Commerce Gina Raimondo said that the "Chip and Science Act of 2022" is fundamentally a national security initiative, and the "National Security Protection Clause" will help ensure that adversary countries cannot obtain cutting-edge technology. against the US and allies. Gina Raimondo called on Japanese companies to also use subsidies to expand investment in the United States. Japanese companies will have to choose hard which side to keep their business in.
U.S. Secretary of Commerce Gina Raimondo speaks about semiconductor chips subsidies during a press briefing at the White House in Washington（REUTERS）
The "National Security Protection Clause" follows three principles: beneficiary chip factories are not allowed to use financial support from other countries; within 10 years of beneficiary chip factories receiving US government subsidies, investment in the above-mentioned "concerned countries" such as China will be strictly restricted; The beneficiary chip factory conducts joint research or technology licensing work with foreign entities of concern on technologies and products that cause national security concerns.
Choi Sang-mok, chief economic secretary of South Korea’s presidential office, said at a press conference at the Yongsan Presidential Palace on the same day that South Korean companies operating existing production equipment in China will not be affected by this. The increase in storage capacity per unit wafer area due to technology upgrades is not considered an increase in production capacity, and companies can use this to further increase production capacity. Minister of Industry and Industry Li Changyang told reporters that the detailed rules announced by the United States have largely eliminated the uncertainty caused by various worries, and companies can flexibly use investment and production strategies.
The Korean Ministry of Industry stated that Korean companies can not only keep their production equipment in China and carry out some expansion, but also achieve sustainable technological upgrades. In view of the fact that the increase in storage capacity per unit wafer area brought about by technological progress is not considered as an increase in production capacity, companies can further increase production capacity according to business strategies. The government will continue to communicate with the industry, carefully analyze the content of the detailed rules, and continue to negotiate with the US side during the 60-day comment period based on the analysis results.
At the Yongsan Presidential Palace in Seoul, Choi Sang-mok, the chief economic secretary of the presidential office, attended a press conference（YONHAP NEWS）
In response to the US "guardrail" clause, Chinese Foreign Ministry spokesperson Wang Wenbin pointed out at a regular press conference that the US's so-called "guardrail" is an outright technological blockade and protectionist behavior. In order to maintain its hegemony, the United States continues to generalize the concept of national security. Abusing export control measures, even at the expense of the interests of allies, coercing some countries to contain China, artificially promoting the "decoupling and breaking" of industrial chains, seriously violating the laws of market economy and the principle of fair competition, and seriously hindering the recovery and development of the world economy. We firmly oppose this and have lodged solemn representations with the US side many times. China will continue to firmly safeguard the legitimate rights and interests of Chinese companies.
Chinese Foreign Ministry Spokesperson Wang Wenbin
Reference news
related news
We are a professional distributor of electronic components, providing a wide range of electronic products, saving you a lot of time, effort and cost through our meticulous order preparation and fast delivery service.
Share this post
