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The
package represents roughly a 26% increase from the 26 trillion
won (about $18 billion) announced last year. Officials are
focusing on providing low-cost loans, subsidies, and other
financial incentives to stimulate investment in the
semiconductor sector. The government aims to facilitate the
development of advanced chips by expanding financial assistance
for research and development activities and high-tech
manufacturing equipment
Officials also plan to boost spending on industrial
infrastructure, including covering the larger part of the costs
for building underground power transmission systems in
semiconductor clusters in the cities of Yongin and Pyeongtaek,
which have attracted investments from chip giants Samsung and SK
Hynix.
The government said in a statement that the plans aim to address
uncertainties stemming from U.S. trade policies and to maintain
the competitiveness of South Korea’s chip industry. There are
growing concerns that South Korean companies are falling behind
rivals in Taiwan and other countries in producing high-tech
chips for artificial intelligence and advanced applications,
while Chinese competitors are rapidly closing the gap in memory
chips.
“The U.S. government has postponed its plans for reciprocal
tariffs for 90 days. There’s anticipation that product-specific
tariffs will be announced for sectors such as semiconductors or
pharmaceuticals,” South Korean Finance Minister Choi Sang-mok
said in a policy meeting on Tuesday. “This is a valuable time to
strengthen the competitiveness of our companies in the face of a
global trade war.”
South Korea plans to dispatch a delegation to the United States
soon to address recent tariff hikes and other trade concerns,
part of Seoul’s ongoing efforts to shield the country’s
export-driven economy from negative impacts.
The government also last week launched an emergency funding
program worth 3 trillion won ($2 billion) to help its automobile
industry cope with the impact of increased tariffs imposed by
the United States. That package includes expanded low-cost
financing from state-run lenders, as well as a new financing
program backed by auto giants Hyundai and Kia, along with
financial institutions, aimed at supporting struggling carmakers
and auto parts manufacturers.
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