U.S. Democrats Say Trump Administration's Review of Samsung and SK hynix Subsidies Was a Mistake

[Financial News]  

Ro Khanna, the Democratic Party's ranking member on the U.S. House Select Committee on China, sharply criticized the Trump administration's changes to semiconductor policy.
According to the Financial Times on the 25th local time, Khanna said in a letter dated the 22nd to United States Secretary of Commerce Howard Lutnick that President Trump's decision to reconsider subsidies from the Joe Biden administration aimed at supporting Samsung Electronics and SK hynix's semiconductor plants in the United States was a major mistake.
He said the suspension of subsidy payments had disrupted chip plant plans and driven up prices for U.S. electronics products.
In the letter, Khanna said, "The Trump administration has weakened efforts to restart U.S. semiconductor production and, further, has contributed to the consumer electronics price increases we are seeing now." The letter added, "Recent reports suggest the Commerce Department appears to be obstructing the existing CHIPS Act commitments promised to Samsung and SK hynix."
Khanna also urged the Trump administration to make clear whether it would allow U.S. companies to source memory chips from Chinese semiconductor firms, including blacklisted CXMT. He also demanded an explanation of how it would mitigate the economic and security risks that such a move could create.
Apple has recently been lobbying for permission to buy chips from Chinese companies, citing a shortage of memory semiconductors amid the artificial intelligence boom.
Khanna warned that the current memory shortage could also have a negative impact on U.S. national security.
He said, "If U.S. or South Korean companies cannot meet U.S. demand, consumer electronics makers could turn to Chinese memory suppliers, including CXMT," adding, "Needless to say, increasing dependence on Chinese supply chains is not in the U.S. national interest."
Concerns are also emerging within the Republican Party.
According to the Financial Times, Republican John Moolenaar, chairman of the House Select Committee on China, also expressed concern in a recent letter to Lutnick that U.S. companies such as Apple are seeking to buy memory chips from CXMT.
Apple raised the prices of its MacBook and iPad by about 20% each last month, citing higher memory chip prices. Dell and HP had already raised prices earlier this year.
Meanwhile, Micron, Samsung Electronics, and SK hynix received approval for production subsidies under the CHIPS and Science Act, enacted during the Biden administration in 2022. The subsidies are paid out as each business reaches specific milestone targets. The total subsidy package amounts to $49 billion.
President Trump has strongly criticized the program. He has argued that threatening tariffs would be far more effective than providing subsidies.
Lutnick also said last year that the subsidies appeared to be "excessively generous" and that they were under review.
[email protected] Song Kyung-jae Reporter