US grants 9 trillion won subsidy to Samsung Electronics

Samsung Electronics will receive 6.4 billion dollars in semiconductor subsidies from the U.S. government, the third largest after Intel's 8.5 billion dollars and TSMC's 6.6 billion dollars. Compared to the investment amount, the subsidies are reportedly higher than those of Intel and Taiwan.

It is fortunate that Samsung Electronics' investment of more than 40 billion dollars in the US was duly recognized. Its subsidy ratio to investment amount is 16%, higher than TSMC's at 10.2% and Intel's at 8.5%. The announcement is seen as U.S. recognition of the company’s decision to increase investment in plants located in Taylor, Texas, by 2.6 times the original plan and produce cutting-edge products such as cutting-edge 2-nanometer chips.

Despite the good news, however, we cannot afford to welcome the decision whole-heartedly, as the objective of the U.S. “Semiconductor Act,” which includes a total of 52.7 billion dollars in support, is to reduce dependence on semiconductors from East Asia, including Korea and Taiwan, and produce 20% of the world’s cutting-edge semiconductors in the U.S. If Samsung starts manufacturing next-generation artificial intelligence (AI) semiconductors in the United States, Korea’s share in the global supply chain will decline. The number of more than 20,000 jobs that will be created in the United States through the investment is a far outcry from Korea, where youth employment is a concerning social issue.

It is not realistically feasible for Korean companies to act on their own. In contrast, the United States, which owns the original technology, leads the revamping of the global semiconductor supply chain. At the same time, we cannot afford to turn a blind eye to advanced economies absorbing investments of Korean companies. We must find a way to embed core research and development (R&D) capabilities, high-tech production facilities, and quality jobs in Korea by supporting Samsung Electronics, which is building a semiconductor cluster in Yongin by spending 360 trillion won over 20 years. We need an incentive system and human resources development plan that are just as competitive as leading economies.