President Joe Biden defended his administration’s semiconductor subsidies, saying that they weren’t designed to hurt China but to bolster manufacturing and jobs in the US.
(Bloomberg) — President Joe Biden defended his administration’s semiconductor subsidies, saying that they weren’t designed to hurt China but to bolster manufacturing and jobs in the US.
Asked whether measures to restrict investments in China placed US allies in a difficult spot, Biden on Wednesday said both the US and South Korea would benefit from creating more resilient supply chains.
“It wasn’t designed to hurt China. It was designed to — so we didn’t have to worry about whether or not we had access to semiconductors,” Biden said during a joint press conference with South Korean President Yoon Suk Yeol in the White House Rose Garden.
“We are not going to sit back and be in a position where we don’t have access to those semiconductors,” he added.
The Biden administration’s Chips and Science Act is offering grants and tax credits to incentivize semiconductor manufacturing in America. But the money comes with strings attached, including sharing excess profits with the US government and stringent rules that prohibit significant expansion of operations in China.
Read more: Biden Stunts Growth in China for Chipmakers Getting US Funds
The Commerce Department has said those measures are necessary to ensure taxpayer dollars aren’t wasted or spent to increase reliance on China. Lawmakers have also pushed for strong implementation of the rules.
Biden also reiterated his stance that the law isn’t intended to harm South Korea.
“The reassurance is that it’s overwhelmingly in our interest for Korea to do well,” Biden said. “Most of the South Korean companies believe that there’s somehow a US effort to slow them down, prevent their growth or anything like that. We’d like to see them grow. And I mean that sincerely. It’s overwhelmingly in the US interest for South Korea to do very well economically.”
“We view South Korea’s economic growth as a benefit to the United States as well as freedom around the world,” he said.
South Korea’s Samsung Electronics Co. and SK Hynix Inc. have voiced concerns about the onerous requirements. The country’s trade minister, Lee Chang-yang, said the Korean government will work closely with the US to try and resolve the various uncertainties arising from the law as well as address the provisions that are burdensome to companies.
Those can be substantially alleviated and resolved through negotiations involving the companies, the minister added.
Yoon on Wednesday said the US and South Korea had agreed to a dialogue on next-generation emerging technology, pertaining to chips, batteries and other areas, with the aim of promoting research and development.
“President Biden has said that no special support and considerations will be spared for Korean companies’ investment and business activities,” he added.
Read more: South Korea Worries About Strings Attached to US Chip Subsidies
Samsung has a $17 billion plant in development in Texas and is expected to apply for the subsidy program.
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