Tuesday, 18th June 2024

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Korea unveils $19 bil. support package for chip industry

President Yoon Suk Yeol speaks during an economic issue review meeting at the presidential office in Seoul, Thursday. Yonhap

The government unveiled a 26 trillion won ($19 billion) package of comprehensive government support for the country’s semiconductor industry, Thursday, to offer Korean companies a boost as competition intensifies among global chip manufacturers.During a meeting on economic issues at the presidential office in Seoul, President Yoon Suk Yeol said the government-led initiative for the national chip industry will encompass support for a wide range of sectors related to the growth of the semiconductor business, including finance, infrastructure, research and development (R&D), as well as backing for small- to medium-sized enterprises (SMEs).The announcement comes as many countries are vying to improve their chip industries and lure global semiconductor giants by offering subsidies. Highlighting the semiconductor industry as a pivotal field marked by intense global competition, Yoon underscored the critical importance of bolstering and supporting the nation’s chip industry. “Countries’ fates now depend on who can first produce cutting-edge semiconductors with highly advanced information processing capabilities. Korea should provide robust support for the semiconductor industry to ensure that we do not fall behind other rival countries in semiconductor development,” the president said during the meeting.

Out of the total 26 trillion won, the government plans to allocate 17 trillion won for financial assistance aimed at aiding companies establish large-scale chip infrastructure. Yoon explained that this fund would alleviate liquidity constraints encountered by industry players, considering the substantial investments required for constructing new chip manufacturing facilities.Furthermore, the government will implement various tax incentives, through which a portion of the R&D and facility investment costs will be reimbursed to companies.Responding to criticism that the government’s support plan for the semiconductor industry primarily targets tax cuts for large corporations, Yoon said, “Over 70 percent of the benefits from this comprehensive support program will be directed toward SMEs.”The president also pledged that the government and public sector will assume responsibility for enhancing essential infrastructure necessary for the further advancement of the semiconductor industry, including electricity, water, and road networks.”Above all, the most critical factor in semiconductor production is providing a stable and high-quality electricity supply. I urge the government to talk with the National Assembly to promptly pass the Special Act on the National Power Grid in order to expedite the construction of transmission lines,” Yoon 스포츠토토존 said.

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