{"id":2202340,"date":"2023-09-25T08:00:32","date_gmt":"2023-09-24T23:00:32","guid":{"rendered":"https:\/\/koreapro.org\/?p=2202340"},"modified":"2023-09-24T23:42:14","modified_gmt":"2023-09-24T14:42:14","slug":"us-commerce-department-restricts-chips-fund-recipients-on-concerning-expansion","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/09\/us-commerce-department-restricts-chips-fund-recipients-on-concerning-expansion\/","title":{"rendered":"US Commerce Department restricts CHIPS fund recipients on &#8216;concerning&#8217; expansion"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The U.S. Department of Commerce rolled out its final rule on Friday outlining strict \u2018<\/span><a href=\"https:\/\/www.commerce.gov\/news\/press-releases\/2023\/09\/biden-harris-administration-announces-final-national-security\"><span style=\"font-weight: 400;\">guardrails<\/span><\/a><span style=\"font-weight: 400;\">\u2019 for recipients of the U.S. <\/span><a href=\"https:\/\/koreapro.org\/2022\/08\/why-south-koreas-biggest-chipmakers-are-betting-big-on-us-over-china\/\"><span style=\"font-weight: 400;\">CHIPS and Science Act<\/span><\/a><span style=\"font-weight: 400;\"> funding. According to the department, beneficiaries must not materially expand their semiconductor manufacturing capacity in designated \u201cforeign countries of concern\u201d for 10 years from the award date. Such \u201cmaterial expansion\u201d implies any increase in a facility\u2019s production capacity by more than 5% for advanced facilities and beyond 10% for legacy facilities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This decision comes amid mounting security apprehensions over technological advancements potentially being used against the U.S. and its allies. The rule additionally highlights the classification of specific semiconductors as \u201ccritical\u201d to U.S. national security, especially those with properties essential for niche applications like quantum computing and specialized military capabilities. \u201cThese guardrails will protect our national security and help the United States stay ahead for decades to come,\u201d said U.S. Secretary of Commerce Gina Raimondo, emphasizing the Biden administration\u2019s intent.\u00a0<\/span><\/p>\n<p><b>Why It Matters<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The U.S. Department of Commerce\u2019s \u2018guardrails\u2019 under the CHIPS and Science Act resonate profoundly in South Korea, a global heavyweight in the semiconductor industry. Prominent South Korean firms are clamoring for <\/span><a href=\"https:\/\/en.yna.co.kr\/view\/AEN20230924000600320?section=news\"><span style=\"font-weight: 400;\">clarity<\/span><\/a><span style=\"font-weight: 400;\">, particularly on the <\/span><a href=\"https:\/\/koreapro.org\/2022\/08\/friends-without-benefits-how-a-new-us-law-penalizes-south-korean-carmakers\/\"><span style=\"font-weight: 400;\">Inflation Reduction Act<\/span><\/a><span style=\"font-weight: 400;\">\u2019s definition of a \u201cforeign entity of concern.\u201d Their plea underscores the prevailing uncertainties that could disrupt business strategies and investment pipelines, accentuating the necessity for transparency in a rapidly evolving global supply chain.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">South Korean companies aren\u2019t idly standing by. By forming <\/span><a href=\"https:\/\/en.yna.co.kr\/view\/AEN20230924001900320?section=news\"><span style=\"font-weight: 400;\">partnerships<\/span><\/a><span style=\"font-weight: 400;\"> with the likes of China\u2019s Huayou Group to construct electric vehicle (EV) battery material plants in Morocco and Indonesia, ROK firms such as LG Chem seek to position themselves in locales that could skirt the new U.S. restrictions while cementing their stake in the expanding EV market. On the geopolitical front, the <\/span><a href=\"https:\/\/en.yna.co.kr\/view\/AEN20230924003000320?section=news\"><span style=\"font-weight: 400;\">impending discussions<\/span><\/a><span style=\"font-weight: 400;\"> between Seoul and Beijing about a potential summit meeting between South Korean President Yoon Suk-yeol and Chinese leader Xi Jinping signal Seoul\u2019s delicate balancing act. While South Korea continues to align with U.S. directives, there is a palpable effort to ensure Beijing remains a vital partner in the region.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><a href=\"https:\/\/koreapro.org\/tag\/inter-korean-foreign-relations\/\"><span class=\"tag\">Inter-Korean &amp; Foreign Relations<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>The U.S. Department of Commerce rolled out its final rule on Friday outlining strict \u2018guardrails\u2019 for recipients of the U.S. CHIPS and Science Act funding. According to the department, beneficiaries must not materially expand their semiconductor manufacturing capacity in designated \u201cforeign countries of concern\u201d for 10 years from the award date. Such \u201cmaterial expansion\u201d implies [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2202341,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24,28],"class_list":["post-2202340","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy","tag-inter-korean-foreign-relations"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US Commerce Department restricts CHIPS fund recipients on &#039;concerning&#039; expansion - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2023\/09\/us-commerce-department-restricts-chips-fund-recipients-on-concerning-expansion\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Commerce Department restricts CHIPS fund recipients on &#039;concerning&#039; expansion - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"The U.S. Department of Commerce rolled out its final rule on Friday outlining strict \u2018guardrails\u2019 for recipients of the U.S. CHIPS and Science Act funding. 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