South Korea’s semiconductor industry may receive a significant boost as the government considers offering subsidies for the first time. The South Korean government is contemplating providing support to high-tech industries, including semiconductors, in a bid to enhance competitiveness and attract investments.
In a recent meeting chaired by Prime Minister Han Duck-soo, officials discussed a proposed plan to offer subsidies to specialized clusters in strategic industries. The move comes as other countries increase their efforts to attract investments in key sectors, prompting South Korea to review its existing incentive programs.
While the final decision on semiconductor subsidies is still pending, officials have hinted at the possibility of extending investment tax deductions and introducing direct subsidies for the industry. Currently, South Korea offers up to a 25% investment tax deduction for national strategic technologies but does not have separate subsidies specifically for semiconductors.
The government plans to focus on supporting private investments in advanced strategic industries, with a target investment of 681 trillion won by 2027. To further bolster the semiconductor sector, the budget for industry support is set to increase to 1.3 trillion won by 2024, with a strong emphasis on infrastructure, investment environments, technology development, and talent cultivation.
South Korea is home to major semiconductor players like SK hynix, Samsung, and LG, which have been making significant investments in the industry. SK hynix, for instance, recently announced a massive $90 billion investment in a mega fab complex, while LG plans to invest $74 billion in various technology sectors.
With countries like the US and Taiwan already providing substantial support to their semiconductor industries, South Korea’s potential move to offer subsidies signals its commitment to staying competitive in the global market. As the demand for advanced technologies like AI continues to grow, such initiatives are crucial for driving innovation and securing a leading position in the semiconductor sector.
