The South Korean government is accelerating negotiations for a U.S. investment package, but support for K-semiconductors appears to be sidelined. As energy projects like LNG and nuclear power take priority, negotiations for subsidies and tariff exemptions for local semiconductor giants Samsung Electronics and SK Hynix have stalled for months.
According to government and industry sources on September 8, the Ministry of Trade, Industry and Energy has reportedly excluded key elements related to K-semiconductor support from its report on the progress of U.S. investment negotiations to the National Assembly. While the Korea-U.S. Strategic Investment Operating Committee has prioritized energy projects, the urgent issues of subsidies and tariffs for domestic semiconductor companies, which are investing 60 trillion won locally, have not even been raised as agenda items.
Samsung Electronics and SK Hynix are investing massive amounts of money to build large-scale production infrastructure in the U.S., including a foundry in Taylor, Texas, and an advanced packaging facility in Indiana. Samsung is increasing its investment in Texas to a total of $37 billion (approximately 55 trillion won), significantly higher than initially planned. SK Hynix is also constructing a next-generation high-bandwidth memory (HBM) advanced packaging plant and research center in Indiana, with an investment of $3.87 billion (approximately 5.2 trillion won).
Despite these investments, the timeline and final amount for the subsidies promised under the U.S. CHIPS Act remain uncertain. Kim Jeong-kwan, Minister of Trade, Industry and Energy, stated after a government meeting that negotiations in the energy sector are progressing rapidly due to urgent power infrastructure needs in the U.S. However, he emphasized that the issues of subsidy payments and tariff exemptions for domestic semiconductor companies are also critical and cannot be delayed, indicating that intense negotiations are ongoing behind the scenes with the U.S. government.
Meanwhile, skepticism about U.S. subsidies and increasing tariff pressures have heightened uncertainty for companies operating locally. President Donald Trump recently criticized the existing system as a "terrible law," suggesting that high tariffs would compel companies to build factories in the U.S. without subsidies.
Commerce Secretary Gina Raimondo also stated that while companies producing semiconductors in the U.S. would receive tariff exemptions, those that do not would face significant costs to access the top market in the world, further escalating tariff pressures.
The key issue is whether the 60 trillion won direct investment by Samsung and SK Hynix will be recognized as part of the $350 billion investment package agreed upon by both countries. According to the agreement made in January, the $350 billion package consists of $200 billion for U.S.-led strategic projects and $150 billion for shipbuilding cooperation, which are structurally separate from individual foreign direct investments (FDI) by South Korean companies.
An industry insider noted, "While achievements in energy negotiations are significant, if the subsidy confirmations and tariff issues for semiconductor plants, a key national strategic industry, are not resolved clearly, the practical benefits of U.S. investments will inevitably be greatly diminished. Given the risk of soaring production costs in the U.S., a comprehensive government effort and meticulous final negotiations are more urgent than ever before the final signing."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.