South Korea announced on Tuesday a significant expansion of its support for the semiconductor industry, raising its aid package to 33 trillion won (approximately $23.25 billion). This marks a 27% increase from the previously announced 26 trillion won plan in 2023, as the country aims to reinforce its global competitiveness in the face of mounting geopolitical and economic uncertainties.
The enhanced package comes amid growing pressure on the government to step up assistance, particularly as policy ambiguity looms under the current U.S. administration and Chinese semiconductor firms intensify their push in the global market.
According to a joint statement released by several ministries, including the Ministry of Trade, South Korea will also increase financial aid earmarked specifically for chip manufacturers to 20 trillion won, up from the previous 17 trillion won. The government emphasized that these efforts are aimed at helping domestic firms navigate rising production costs and strengthen their global standing.
South Korea remains a global heavyweight in memory chip production, home to industry leaders like Samsung Electronics and SK Hynix. However, despite their dominance in memory technologies, these companies have lagged behind competitors in areas like chip design and contract manufacturing—segments that are becoming increasingly crucial.
In 2024, semiconductor exports hit $141.9 billion, making up 21% of South Korea’s total export value. China and the United States remained key destinations, with shipments valued at $46.6 billion and $10.7 billion respectively.
Adding to the sector’s challenges, former U.S. President Donald Trump announced plans to reveal new tariff rates on imported semiconductors within the next week. He also hinted at possible exemptions for select companies, injecting further uncertainty into international trade dynamics.
Following the announcement, Finance Minister Choi Sang-mok confirmed that South Korea would remain in close dialogue with the U.S. regarding ongoing Section 232 investigations into semiconductor and biopharmaceutical imports, aiming to safeguard the interests of Korean businesses.
Just last week, Seoul also rolled out emergency aid measures for the automotive sector to help offset potential U.S. tariffs. These measures include tax incentives, subsidies, and market diversification efforts—part of a broader strategy to cushion key export-driven industries from global trade disruptions.
The latest policy shifts come during a period of transition in the global tech industry, including at major companies like Intel, where newly appointed CEO Lip-Bu Tan has recently taken the reins following the departure of Pat Gelsinger.
With the semiconductor sector at the heart of technological advancement and economic growth, South Korea’s latest move underscores its commitment to securing a competitive edge in an increasingly volatile global market.
