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[News] South Korea to Boost Semiconductor with a 26 Trillion Won Subsidy Program Starting in July
According to reports from the Chosun Daily, starting from July, the South Korean government will begin offering incentives and subsidies to semiconductor companies, launching a 26 trillion won (USD 19 billion) funding program to support the industry.
While China and the United States are introducing government funds into strategic sectors, the South Korean government is also joining this effort amid geopolitical tensions that are fragmenting the global chip supply chain.
Initially, South Korea will start with an 18 trillion won (USD 12.94 billion) investment program, including preferential loans and investment funds. According to a statement from the Ministry of Economy and Finance, eligible companies will be able to borrow from a 17 trillion won low-interest loan program.
According to the Chosun Daily, the financial support program will commence next month, providing preferential interest rates of 0.8 to 1.0 percentage points for large companies and 1.2 to 1.5 percentage points for small and medium-sized enterprises, compared to standard industrial bank loans.
Additionally, the government aims to raise up to 800 billion won for a new semiconductor ecosystem fund by 2027. By 2025, the fund plans to gather 300 billion won and will begin making equity investments in materials, components, equipment, and fabless companies starting next month.
The government is also planning to extend the tax credit scheme for developing national strategic technologies by an additional three years, which was initially scheduled to expire at the end of this year.
Before the aforementioned “comprehensive support package” announced on 26th, the South Korean government is already investing USD 470 billion to establish a massive semiconductor cluster in the suburbs of Seoul, which covers areas from Pyeongtaek to Yongin, aiming to produce 7.7 million wafers monthly by 2030.
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