South Korean chipmakers have expressed alarm at tough conditions revealed this week for companies taking advantage of a $39bn US federal fund designed to encourage advanced chip manufacturing in America.

Of particular concern is a requirement for companies to share some of their unexpected excess profits with the US government, according to a clause in commerce department guidelines unveiled this week for applications for funds from the Chips Act, passed by Congress last year.

The new subsidies are aimed at building a leading edge US semiconductor industry as part of efforts to counter China, but South Korean chipmakers such as Samsung Electronics and SK Hynix are worried about the implications as they plan to build plants in the US and still rely heavily on their chipmaking operations in China.