EU expected to probe South Korean chip subsidies

European trade officials are expected to announce later this week that they will question the South Korean government about alleged subsidies to that country's two main chip makers.

German chip maker Infineon Technologies AG said last month that it had lodged a complaint with the European Commission about suspected illegal South Korean government subsidies to chip manufacturer Hynix Semiconductor Inc. Commission trade spokesman Anthony Gooch declined to comment Wednesday on Infineon's complaint.

However, it is expected that the European Union will follow up on the complaint. The alleged subsidies are believed to take the form of tax benefits, export credits, subsidized loans, debt rollovers and debt-to-equity swap programs.

South Korean authorities said the Commission has decided to investigate whether Hynix and Samsung Electronics Co. Ltd. received illegal government subsidies, according to a Dow Jones Newswires report Wednesday. The Commission will officially announce the investigation Thursday, according to an official of the South Korean Ministry of Foreign Affairs and Trade quoted in the report.

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