The government will add technologies related to semiconductor materials, components, and equipment to the areas eligible for tax credit benefits under the Restriction of Special Taxation Act. To expedite the establishment of the Yongin semiconductor cluster, it plans to increase the government support limit for infrastructure such as power and wastewater management and pursue additional financial support, including cost-sharing for the underground transmission network.
Minister of Trade, Industry and Energy Ahn Duk-geun noted the 'semiconductor industry support plan' at a meeting with the semiconductor industry held at the Korea Trade Insurance Corporation in Jongno, Seoul, on the morning of the 10th.
The meeting was held as government and private sectors gathered to discuss countermeasures ahead of the U.S. Trump administration's imposition of semiconductor tariffs. An official from the Ministry of Trade, Industry and Energy said, “On the 2nd (local time), the U.S. government announced mutual tariffs, including 25% for Korea,” adding, “There is a large uncertainty surrounding the semiconductor industry as item tariffs on semiconductors are also planned.”
During the meeting, industry representatives projected that the impact of tariffs would be limited in the short term, considering the constraints on domestic semiconductor production in the U.S. and the high market share of South Korean corporations in high-value products such as HBM. However, they expressed concerns about the uncertainties arising from rapid changes in the trade environment and urged the government to engage actively in discussions with the U.S. They also requested the expansion of financial support for infrastructure to facilitate stable domestic investment, as well as enhancements in tax and financial support and the easing of regulations regarding mandatory installation of distributed energy systems.
In response to these industry demands, the government has decided to explore various measures to reduce the expense burden associated with materials and components that rely heavily on imports. The government plans to expand the use of domestic semiconductors at the 'National AI Computing Center' and actively assist in developing export pathways for AI data centers in the Middle East and Southeast Asia.
The government will accelerate the support for infrastructure and regulatory improvements to promote corporate investment. To successfully establish the Yongin semiconductor cluster, it will increase the government support limit for infrastructure such as power and wastewater management and pursue additional financial support, including cost-sharing for the underground transmission network. The government plans to review the easing of mandatory installation of distributed energy systems in semiconductor manufacturing facilities and to reduce the processing time for inspections of facilities handling small quantities of hazardous chemicals.
The government will also enhance the competitiveness of the entire semiconductor ecosystem. Initially, it plans to establish an operating corporation for 'Trinity Fab' in the first half of the year to promote fab construction. To secure cutting-edge technology, it will plan and promote large-scale R&D projects dedicated to specialized advanced industries and continue to strengthen investment for commercialization, including innovative loans for advanced industrial technology. Additionally, it will swiftly advance a 1 trillion won on-device AI semiconductor development project focused on four key fields: automotive, robotics, defense, and IoT, by forming a dream team of industry, academia, and research and applying for exemption from preliminary feasibility studies.
Minister Ahn Duk-geun stated, “The trade and supply chain risks we face must be met with a united effort from both the public and private sectors,” adding, “The government will continue close consultations with the U.S. at various levels, and since the tariff war is also an investment war over attracting corporations, we will mobilize national capabilities to promptly prepare support measures for the semiconductor industry.”