Samsung Electronics holds a regular shareholders meeting at the Suwon Convention Center in Gyeonggi Province on March 19, 2025. (courtesy of Samsung Electronics)
The US government has hinted that it intends to renegotiate semiconductor subsidies, reviving concerns about the fate of Samsung Electronics. There are also predictions that the US government will demand that Samsung and other semiconductor firms expand their investments on US soil while slashing the subsidies they enjoy.
This could push the company’s already in-the-red foundry business even further into a predicament. As these developments come at a time when Samsung has repeatedly announced plans to reduce the scale of its investments going forward, all eyes are on what moves the electronics maker will make next.
According to a fact sheet released by the White House on Monday, US President Donald Trump signed an executive order to establish an office within the Department of Commerce dubbed the “United States Investment Accelerator.” The organization will reportedly facilitate and accelerate investments by reducing regulatory burdens and speeding up permitting for firms that invest above US$1 billion in the US.
The accelerator will also manage the CHIPS Program Office to “deliver the benefit of the bargain for taxpayers, negotiating much better CHIPS Act deals than the previous Administration.”
The materials released by the White House indicate that the Trump administration intends to renegotiate deals regarding semiconductor subsidies. Trump has expressed disapproval of the current CHIPS and Science Act, which provides US$52.7 billion in subsidies to semiconductor firms as an incentive to build and operate factories in the US.
Industry insiders are predicting that the Trump administration will move to renegotiate contracts and deals signed by the Biden administration. In such a process, the US is likely to demand increased investment in the US or reduce subsidies, according to analysts.
As if to confirm these predictions, Taiwan’s TSMC, the world’s largest foundry, announced last month that it would increase US investments by a whopping US$100 billion.
If the US does push for renegotiations, Samsung Electronics’ troubles will likely deepen. For starters, the firm is already stretched too thin to expand investments in the US. Samsung made a deal with the Biden administration to produce 2 nm chips at a new fabrication plant in Texas. While important in terms of technological prowess and growth potential, the current yield provided by such cutting-edge production is low. Insufficient orders for 2 nm fabrication have already been identified as a major cause of Samsung’s current deficit. This is why Samsung reduced investment in the US from US$40 billion to US$37 billion last year.
This reduction in investment is likely to continue in the near future. During a shareholders meeting last month, Han Jin-man, the head of Samsung Electronics’ foundry business, said the recent slowdown was “not an issue that can be solved within the first two quarters.”
“I propose drastically reducing costs incurred by inefficient investments by reducing such investments,” he added.
If the US does indeed slash subsidies, the impact is expected to be considerable. The fact that the subsidy-to-investment ratio was already reduced under the Biden administration is adding to concerns. Based on Samsung’s reduction in US investment, the US government cut its subsidies to Samsung from US$6.4 billion to 4.7 billion, a 26% reduction. This dropped the subsidy-to-investment ratio from 16% to 13%.
By Lee Jae-yeon, staff reporter
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