The government announced a comprehensive support plan for the semiconductor ecosystem at the Economic Ministers’ Meeting on the 26th, aiming to bolster South Korea’s position in the fiercely competitive global semiconductor market. This initiative, which builds on the 26 trillion won support direction outlined in the 2nd Economic Issue Review Meeting, focuses on enhancing the overall competitiveness of the semiconductor ecosystem.
To facilitate smooth investment funding for semiconductor companies, a semiconductor financial support program worth 18.1 trillion won+α will be launched from next month. By 2027, the government plans to invest up to 2 trillion won (1 trillion won in cash + 1 trillion won in kind) in the Korea Development Bank to create a 17 trillion won low-interest loan program, with loans to semiconductor companies beginning next month. Large companies will benefit from preferential interest rates of 0.8~1.0%p, while small and medium-sized enterprises (SMEs) will receive rates of 1.2~1.5%p, providing the lowest interest rates in the market.
Additionally, a new semiconductor ecosystem fund will be created, expanding the semiconductor ecosystem fund to 1.1 trillion won by 2027 to support the scaling up and expansion of companies. The current semiconductor ecosystem fund, which aims to raise 300 billion won by next year, will start equity investments in materials, parts, and fabless companies from next month.
The government will also extend the application period for the national strategic technology tax credit by three years and expand its scope. This includes considering the addition of advanced semiconductor materials, parts, and equipment-related technologies to the national strategic technology. Through the revision of the Restriction of Special Taxation Act enforcement decree, software rental/purchase costs, and rental/utilization fees for research and testing facilities will be added to the scope of application. For research personnel conducting both national strategic technology and general R&D, the national strategic technology R&D tax credit rate will be applied proportionally based on actual research hours.
To further strengthen the overall competitiveness of the semiconductor ecosystem, 5 trillion won will be invested intensively in R&D, commercialization, and workforce development from 2025 to 2027. The government will swiftly complete large-scale R&D preliminary feasibility studies, such as the advanced semiconductor mass production-linked mini-fab construction project, to secure technological competitiveness. Additionally, AI computing infrastructure will be expanded to strengthen the foundation for the demonstration and commercialization of advanced semiconductors, including AI semiconductors.
Infrastructure for semiconductor clusters, such as roads, water supply, and electricity, will be quickly established, with the public sector actively sharing the costs. The government will pursue exemption from preliminary feasibility studies and national funding support for the relocation and expansion of National Route 45, which traverses the Yongin National Industrial Complex site. For the integrated double-pipeline project supplying water to the Yongin National and General Industrial Complexes, the government will also pursue exemption from preliminary feasibility studies, and the Korea Water Resources Corporation plans to share part of the pipeline construction costs.
To ensure the stable operation of the Yongin National Industrial Complex, phased power supply will be promoted. In the first phase, an LNG power plant will be constructed within the industrial complex to supply 3GW of power, and in the second phase, a long-distance transmission line will be built. The detailed construction plan for the long-distance transmission line will be established by the end of August, with construction costs shared by the public and private sectors.
The semiconductor industry is a critical component of modern electronics, essential for technologies such as AI, IoT, and 5G networks. South Korea, home to major players like Samsung Electronics and SK Hynix, has a well-established semiconductor ecosystem. The government’s substantial investment in this sector underscores its strategic importance for national security and economic growth. The Economic Ministers’ Meeting, a significant platform for discussing and announcing economic policies, highlights the government’s commitment to maintaining South Korea’s competitive edge in the global semiconductor market.
