On the 4th (local time), U.S. President Donald Trump announced the plan to abolish the 'CHIPs Act,' enacted by the previous Biden administration, during his first joint address to Congress in his second term. This raised a red flag for Samsung Electronics and SK hynix, which secured subsidies from the Biden administration. However, since some Republican lawmakers also supported the semiconductor law, there are assessments noting that the abolition of the semiconductor law may be difficult to realize.
On that day, Trump said, "The semiconductor law is terrible. We give them hundreds of billions of dollars, but they are taking our money and not using it, and it has no meaning." He asserted that the "semiconductor law, established through bipartisan agreement in 2022, should be abolished." He further told House Speaker Mike Johnson that "the semiconductor law must be abolished, and the remaining funds should be used to reduce government liability or for other purposes."
The semiconductor law is a bill prepared by the Biden administration in August 2022, aimed at strengthening the semiconductor industry in the U.S. It includes provisions to provide subsidies for semiconductor production ($39 billion) and research and development ($13.2 billion) to corporations building semiconductor-related facilities in the U.S., totaling $52.7 billion (75.5 trillion won) over five years. The core of this initiative is to provide subsidies to corporations that make large-scale investments in the U.S. and produce semiconductors domestically.
However, Trump believes that imposing tariffs can yield subsidies' effects. The logic is that if tariffs are imposed, foreign corporations will have no choice but to build factories in the U.S. to avoid tariffs. On the same day, Trump stated, "If foreign corporations come to the U.S., they do not have to pay tariffs. They can build factories and produce in the U.S.," and noted that securing investments of $1.7 trillion (approximately 247.45 trillion won) through the America First strategy is a result of his victory in the election.
He also cited as an example that Taiwan's TSMC, the world's leading foundry (contract semiconductor manufacturing) firm, announced on the 4th that it would invest $100 billion (approximately 145.56 trillion won) in the U.S. after meeting with Trump at the White House on the 3rd. Prior to TSMC's investment announcement, Trump had hinted at imposing a minimum tariff of 25% on semiconductors coming into the U.S., leading to the analysis that TSMC decided to invest in the U.S. to avoid tariffs. U.S. Secretary of Commerce Howard Lutnick also explained that TSMC came to the U.S. "to avoid tariffs."
Meanwhile, toward the end of its term, the Biden administration confirmed plans to grant $4.75 billion (approximately 6.93 trillion won) to Samsung Electronics and $458 million (approximately 670 billion won) to SK hynix based on the semiconductor law. Reuters reported that "some officials expressed concerns that Trump could invalidate the binding subsidy agreements made by the Biden administration." However, Bloomberg noted that "dozens of Republican lawmakers had supported the semiconductor law, and there are factories benefiting from the semiconductor law even in regions with strong Republican support," predicting that Trump may face difficulties in securing votes in Congress to repeal the semiconductor law.