South Korea Boosts Chips Support Package With $23.25 Billion Amid Global Uncertainty
Amid the uncertainties under the United States administration, South Korea announced an increase in its support package for the country’s vital semiconductor industry to 33 trillion won ($23.25 billion) on Tuesday. It is essentially making an increase of 25% from the 26 trillion packages revealed last year.
The South Korean government’s boost in its key chips sector is designed to help companies cope with heavier costs as they compete globally amid growing uncertainty following the inauguration of the new US administration.
"With the domestic foundation in system semiconductors being weak and increased uncertainties after the new US government's launch, there is a growing call within the industry for expanded government support," the finance ministry said in a press release, according to a report by Yohap.
Asia’s fourth largest economy is home to the world’s largest memory chipmaker, Samsung Electronics Co., which already runs several semiconductor facilities in Yongin and nearby regions. Its competitor, SK hynix Inc., has also announced plans to invest in building chip facilities in Yongin.
In 2024, South Korea's semiconductor exports reached $141.9 billion, making up 21% of the nation's total exports, according to government data. Of this, shipments to China totalled $46.6 billion, while exports to the United States amounted to $10.7 billion, as per Reuters.
An additional 3 trillion won will be used to increase existing low-interest loans for the industry between 2025 and 2027, bringing the total to 20 trillion won, the ministry said, reported Yonhap.
US President Donald Trump announced on Sunday that he would reveal the tariff rate on imported semiconductors within the coming week, noting that some flexibility would be granted to certain companies in the sector.
ALSO READ: Trump Freezes $2.3 Billion In Federal Funding For Harvard University
Following this announcement, Finance Minister Choi Sang-mok stated during a meeting on Tuesday that the South Korean government would actively engage in consultations with the US regarding its Section 232 investigations into semiconductor and biopharmaceutical imports, aiming to minimise any negative impact on domestic firms.
According to Yonhap, the ministry also stated that it would work to strengthen the overall competitiveness of the semiconductor ecosystem, including building advanced chip fabrication plants and initiating large-scale research and development (R&D) projects.
Additionally, the government will support the development of next-generation semiconductors by introducing equipment to detect design errors prior to the prototype production stage, the ministry added.
Last week, South Korea announced emergency support measures for its auto sector, seeking to reduce the blow of US tariffs on a sector that has seen years of sharply rising exports to the United States.
world