Trump calls for termination of the Chip Act, raising concerns among South Korean companies such as Samsung
On March 4th local time, US President Trump called for the termination of the Chip Act during a joint session of the US Congress. This $52 billion semiconductor subsidy program has stimulated companies such as TSMC and Intel to invest over $400 billion in the United States.
The Chip Act, which received bipartisan support in 2022, aims to encourage companies to build semiconductor manufacturing facilities in the United States through subsidies to enhance the US semiconductor industry and reduce dependence on China.
Trump criticized the Chip Bill and said: "We have given tens of billions of dollars, but it is meaningless. They took our money and did not spend it." He urged House Speaker Mike Johnson to use the funds of the Chip Bill to reduce treasury bond or other purposes.
Trump's position is consistent with his broader economic philosophy of incentivizing businesses to invest in the United States through tariffs rather than subsidies. For them, it's important that they don't want to pay tariffs, so they come to build factories, and many other companies are also coming, "Trump said. He emphasized that tariffs are an effective tool for attracting investment.
This news has raised concerns among South Korean semiconductor companies such as Samsung Electronics and SK Hynix, which are investing heavily in the United States under the Chip Act and are expected to receive huge subsidies. The Biden administration has previously confirmed providing $4.75 billion in subsidies to Samsung Electronics and $458 million in subsidies to SK Hynix. As Trump intends to repeal the bill, there is widespread concern about whether these companies will be affected.
The potential repeal of the Chip Act could have significant impacts on international companies and the broader global semiconductor supply chain. Companies like Samsung Electronics and SK Hynix have made significant investments in the United States under the incentives provided by the law. The interconnectedness of global trade and investment decisions means that changes in US policies may have a chain reaction in the international business landscape.
After the Trump administration took office, Apple announced a $500 billion investment plan in the United States, including the construction of an AI server manufacturing facility in Houston, Texas. In addition, on March 3rd, TSMC Chairman and CEO Wei Zhe jia met with Trump and promised to invest at least $100 billion, indicating that major technology companies continue to be interested in expanding their business in the United States.