The 'suspension of subsidies and loan expenditures' by the Donald Trump administration has been hindered by court intervention, increasing tension within the domestic semiconductor industry, including Samsung Electronics and SK hynix. Although Korean companies had already finalized subsidy contracts at the end of former President Joe Biden's term, the Trump administration has stated that it cannot guarantee subsidy payments until it reviews the content.
According to the related industry on the 30th, Howard Ratnik, the nominee for Secretary of Commerce who will oversee the Trump administration's industrial and trade policies, was asked during a Senate confirmation hearing on the 29th (local time) whether he would honor the contracts finalized with the U.S. government for semiconductor law subsidies, to which he replied, "I cannot say. I cannot honor something I haven’t read."
He evaluated the semiconductor law as "a great down payment on our ability to bring semiconductor manufacturing back to the U.S.," but noted, "I think we need to review them properly."
Earlier, Shalanda Young, the acting Director of the Office of Management and Budget (OMB), stated in a memo sent to various government agencies on the 28th (local time) that the federal-level suspension of subsidies and loan expenditures, including the 'Semiconductor (CHIPS) Incentive Program', 'Tax credits for clean vehicles', and 'Advanced manufacturing and production tax credits', would be temporarily halted. This is aimed at filtering out projects from the previous Biden administration that do not align with the operational guidelines of the Trump administration.
In response, the Washington D.C. federal court issued a stay order on the 28th, effectively putting the brakes on the matter, and that day, the White House withdrew the directive document suspending federal-level subsidies and loan enforcement. However, the White House explained that the administrative order from President Donald Trump regarding federal-level expenditures related to the 'Diversity, Equity, and Inclusion (DEI) initiative' and climate change remains valid.
Although there are still areas that need to be observed, the prevailing view among industry insiders is that President Trump’s strong will behind the federal fund enforcement suspension cannot completely exclude the possibility of this measure being realized. Previously, President Trump has repeatedly expressed negative views on the Inflation Reduction Act (IRA), which provides benefits such as subsidies and low-interest loans, and the semiconductor law, since he was a candidate.
There are observations that if this measure is implemented, it could affect the tax credit benefits and loans that Korean companies are to receive under the IRA, as well as the subsidies that Korean semiconductor companies, including Samsung Electronics and SK hynix, are set to receive under the semiconductor law while planning large-scale equipment investments in the U.S.
If the already decided subsidies ranging from hundreds of billions to trillions of won are reduced, it is inevitable that plans for factory construction and production delays will be disrupted. Accordingly, Samsung Electronics and SK hynix are also closely monitoring the situation.
Samsung Electronics has decided on a final investment scale exceeding $37 billion to build a foundry (contract manufacturing) plant in Taylor, Texas, and on December 20 of last year finalized a contract to receive $4.745 billion (approximately 6.9 trillion won) in direct subsidies from the U.S. Department of Commerce.
Based on this, Samsung Electronics has set a policy to accelerate the development of advanced fine processes, construction of the Taylor plant, and customer acquisition, ensuring that there are no delays in preparing for the operation of the Taylor plant in 2026. The Taylor plant of Samsung Electronics, which is the second-largest foundry market player, is expected to serve as an important production base to narrow the gap with the industry leader, Taiwan's TSMC, and to surpass latecomers from China.
SK hynix, which decided to build an advanced packaging production base for artificial intelligence (AI) memory in West Lafayette, Indiana, also received approval on the 19th of last month for a maximum of $458 million (approximately 663.9 billion won) in direct subsidies from the U.S. Department of Commerce. The Indiana plant is expected to begin mass production of next-generation high-bandwidth memory (HBM) and other AI memory products in the second half of 2028.
TSMC has decided to invest a total of $65 billion to build three advanced semiconductor manufacturing plants in Arizona and has agreed to receive $6.6 billion in subsidies. The first plant has already started mass production of 4-nanometer chips.
There is a perspective in the industry that corporations have already received subsidies from previous administrations or that they will continue to receive them without issue under the Trump administration. Notably, TSMC is said to have received some subsidies last year. The confirmation of whether Samsung Electronics and SK hynix will receive them is still pending.
Wendell Huang, Chief Financial Officer (CFO) of TSMC, stated in an interview with U.S. CNBC on the 19th, "We received our first subsidies of $1.5 billion in the fourth quarter of last year," adding, "We expect that subsidies will continue to come in under the Trump administration."
Some expect that even if subsidies are temporarily suspended, those linked to Korean investments and job creation in the U.S. may be restored due to the influence of lawmakers from both parties, whose constituencies include the investment regions.