South Korea is gearing up to roll out a support package worth more than $7 billion to support its chip industry. Finance Minister Choi Sang-mok announced plans for the program to provide financial assistance and tax incentives to chip makers, materials suppliers, and equipment manufacturers.
Choi Sang-mok visited chip materials, parts, and equipment manufacturers to gather insights and address their pressing need for improved financing and tax support. The aid package seeks to facilitate investments and research and development efforts in the chip industry, helping South Korea to compete effectively in the global semiconductor market.
Finance Minister Choi Sang-mok revealed that the government is exploring financing options for the chip support project, including utilizing the state-owned Korea Development Bank or establishing a joint public-private fund. These measures aim to provide financial backing for the initiative and support various segments of the semiconductor industry, including chip materials, equipment manufacturers, and fabless companies. Here, the advanced packaging and mini fab initiatives are aimed at undergoing feasibility studies in the near future.
Last year, South Korea announced the goal of developing the world’s largest chip center with private investment, primarily led by Samsung Electronics. Minister Choi emphasized the government’s determination to support strategic technologies by extending investment tax credits and expanding research and development investment tax credits, contributing to the country’s competitiveness in the global chip market.
Notably, reports surfaced in January outlining Samsung and SK Hynix’s plans to invest KRW622 trillion to expand chip production capacity within a 21-million-square-meter mega cluster, targeting establishing 16 new fabrication facilities by 2047.
South Korea, home to two of the world’s largest memory chip manufacturers, Samsung Electronics and SK Hynix, is at the center of global semiconductor geopolitics. The nation has encountered mounting pressure to restrict exports of advanced chips and equipment to China, prompting negotiations with the US to reconsider proposed restrictions. Last year, the US granted waivers to Samsung and SK Hynix, allowing them to proceed with plans to expand operations in China amid heightened tensions.
President Yoon Suk Yeol has pledged support for the country’s semiconductor industry, vowing to allocate all available resources to secure victory in the ongoing “war” in chips. He has outlined plans to incentivize investments in the sector through tax benefits to grow and compete in South Korea’s critical semiconductor sector.
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