South Korea has announced a financial boost to strengthen its semiconductor industry in the face of escalating global competition. The finance ministry disclosed plans to allocate 17 trillion won $12.22 billion in low-interest loans next month to stimulate corporate investments within the semiconductor sector.
This funding will be accessible to both domestic and foreign companies investing in the local chip sector. Additionally, the government aims to extend tax incentives for strategic technology investments as part of a comprehensive support package valued at 26 trillion won, recently introduced by President Yoon Suk Yeol.
With this, South Korea plans to take proactive measures to support its semiconductor capabilities amidst intensifying global economic pressures. The funding injection is expected to attract both local and international companies to invest in South Korea’s semiconductor industry, with an increase in policy support compared to previous efforts.
A dedicated fund of 1.1 trillion won will be established to enhance the semiconductor ecosystem, focusing specifically on supporting fabless companies and manufacturers of chip materials. This measure aims to strengthen the entire supply chain critical to semiconductor production within South Korea.
Additionally, the government will extend tax incentives to support investments in national strategic technologies. The proposed extension seeks to prolong existing tax credits, which currently provide deductions of up to 15% for facility investments and up to 50% for research and development projects in key sectors like semiconductors, rechargeable batteries, and display technologies.
Looking forward, the government has outlined plans to allocate 5 trillion won between 2025 and 2027 specifically for talent development in semiconductor R&D. This funding marks an increase compared to the approximately 3 trillion won from 2022 to 2024.
Furthermore, the Ministry of Trade, Industry, and Energy has announced an investment of 274.4 billion won in R&D initiatives focused on semiconductor packaging technologies.
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