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South Korea to Launch $12.94 Billion Investment Program for Semiconductor Sector

Government aims to bolster semiconductor industry with low-interest loans and tax incentives
South Korea
Semicon 75
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The South Korean government is set to initiate an 18 trillion won ($12.94 billion) investment program starting in July to support the semiconductor industry. The initiative includes a 17 trillion won ($12.22 billion) low-interest loan program, to be managed by the Korea Development Bank, which will offer loans at preferential rates beginning next month.

Announced during a meeting of economy-related ministers on June 26, this “comprehensive support package” follows President Yoon Suk-yeol’s earlier declaration of a 26 trillion won plan to enhance the competitiveness of South Korea’s semiconductor sector amid growing global competition.

The loan program will provide interest rates 0.8 to 1.0 percentage points lower for large companies and 1.2 to 1.5 percentage points lower for small and medium-sized enterprises compared to standard industrial loans. Additionally, the government plans to raise 800 billion won ($575.66 million) by 2027 for a semiconductor ecosystem fund, with 300 billion won expected by next year to start equity investments in related sectors.

To further support the industry, the government is extending the tax credit scheme for developing national strategic technologies by three years and revising the Special Taxation Act to include software and research facility expenses.

Moreover, a 5 trillion won investment will be made in R&D, commercialization, and human resource development over the next four years. The AI computing infrastructure will also be expanded to support advanced semiconductor development.

Infrastructure projects, such as the expansion of National Route 45 and construction of a power supply strategy including a 3GW LNG power plant, will be expedited to ensure stability and growth for the Yongin National Industrial Complex.

 

 

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