There are significant concerns that South Korea could end up losing its cutting-edge semiconductor technology as the US continues prioritizing the revival of its domestic semiconductor industry.

South Korean companies that invested in the US to build semiconductor factories will have to limit their manufacturing capacity at their Chinese factories to 5 percent or less for 10 years in order to receive US subsidies.

While the new regulations are less strict than the previously feared total ban on upgrading manufacturing facilities in China, the shackles being imposed by the US on the domestic semiconductor industry remain weighty.

On Tuesday, the US Department of Commerce announced detailed regulations of the guardrails concerning subsidies for semiconductors. Countries with semiconductor manufacturing factories in China will be able to expand production by up to 5 percent and companies will still be able to produce more semiconductor chips from one wafer through technological development.

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The excessive information demanded as a condition to receive subsidies from the US, runs the risk that South Korea’s advanced semiconductor technology and business secrets could be leaked. There is even one clause that requires the return of certain subsidies if companies earn more than a certain amount in profits.

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Although the Biden administration emphasizes the importance of alliances through diplomacy and security, there has been a growing perception in the economic field that the US is causing damage to the alliance with its attitude of “America first” and protectionist policies.