The government has prepared a supplementary budget of 12.2 trillion won for wildfire response, trade, and artificial intelligence (AI). Of this, 4.4 trillion won will be allocated for trade damage response and AI and semiconductor sectors. The government held an extraordinary cabinet meeting on the 18th to review and approve this supplementary budget proposal.
◇ "Let’s reduce the impact of U.S. tariffs"… An additional 2.1 trillion won investment
The government will invest 2.1 trillion won in response to the trade war with the United States. Specifically, 1.8 trillion won will go towards tariff damage and support for export corporations, 200 billion won for stabilizing key component supply chains, and 100 billion won for preemptive responses to employment shocks.
Kim Dong-il, director of the budget office at the Ministry of Economy and Finance, noted, "Our industries and corporations are expected to face serious damage due to unprecedented tariff shocks," and stated, "We will provide 1.8 trillion won in support for tariff damage and export corporations in response to trade risks."
The government has established a special financial support package of 25 trillion won for corporations affected by tariff damage and crises. Loans will be provided through the Export-Import Bank (10 trillion won), the Korea Development Bank (4 trillion won), and the Korea SMEs and Startups Agency (700 billion won). The government will invest 200 billion won and 100 billion won in the Export-Import Bank and the Korea Development Bank, respectively. All loans executed through KOSME will receive full government financial support.
The guarantee insurance will also be increased to 10.2 trillion won. The Korea Trade Insurance Corporation will provide 5.7 trillion won, while the Korea Credit Guarantee Fund and the Technology Guarantee Fund will provide 4.5 trillion won in new guarantees and insurance. The government funding for expanding the guarantee insurance totals 500 billion won.
Additionally, the government will create a 500 billion won fund for corporate structural innovation in industries affected by tariff damage through the Korea Asset Management Corporation (KAMCO).
The number of companies eligible for export voucher support will increase from the existing 3,290 to 8,058. A 100 billion won tariff response voucher will also be newly established for damage analysis and alternative market exploration. The investment subsidy rate for returning companies recognized for tariff damage will be raised by 10 percentage points, and support for foreign investment will also be expanded. The government allocated 39.6 billion won for the expanded budget for supporting returning companies and foreign investment.
To prevent employment instability caused by trade crises, the requirements for the 'employment maintenance support fund' will be relaxed. The number of supported personnel will increase from the existing 24,000 to 30,000, with the budget raised from 70.3 billion won to 81.4 billion won. Additionally, 30 billion won will be allocated to the newly established 'employment decline response support' project targeting regions vulnerable to changing trade and industrial conditions.
An additional 200 billion won will be invested to stockpile six key minerals, including rare earth elements, lithium, and magnesium, which are at risk due to China's recent export control measures. For substances such as hydrofluoric acid and graphite, where stockpiling or diversifying import sources is challenging, new cost support programs will be established to enable domestic production. The government has allocated 14.6 billion won for this initiative.
To stabilize the foreign exchange market, the issuance limit for 'foreign-currency-denominated foreign exchange stabilization bonds' will be expanded. The limit will increase from the existing $1.2 billion to $3.5 billion, an increase of $2.3 billion. The issuance limit for won-denominated foreign exchange stabilization bonds will be reduced by the amount the foreign currency issuance limit is expanded.
◇ 1.8 trillion won investment in advanced industries such as AI and semiconductors… Securing 10,000 GPUs
An investment of 1.8 trillion won will be made in the AI sector. Kim Yun-sang, the second vice minister of the Ministry of Economy and Finance, stated, "Since the inauguration of the Trump administration, the U.S. has announced AI investment plans exceeding 700 trillion won, while the EU has over 300 trillion won, and China introduced DeepSeek," adding, "Considering the global AI competition, we reflected this in the supplementary budget."
The government will invest 1.5 trillion won to secure 10,000 high-performance graphics processing units (GPUs) within this year, significantly enhancing computing capabilities. It will allocate 200 billion won to support the development of large language models (LLMs) and focus on strengthening GPU computational power. Through GPU rentals and data purchases, it will select and support elite AI teams. Additionally, the budget for cultivating master's and doctoral level talent will be doubled to secure 3,300 personnel, and the scale of the AI innovation fund will also be doubled. To promote domestic NPUs, the budget will be allocated for the establishment of cluster-based demonstration programs.
Song Sang-hun, director of the Information and Communication Policy Bureau at the Ministry of Science and ICT, stated, "We received confirmation that the purchase of GPUs from NVIDIA is possible," adding that the aim is to secure NVIDIA's latest GPUs, such as the H200 and B200.
Through the supplementary budget, the government will also enhance the competitiveness of advanced strategic industries, including semiconductors. To timely establish the Yongin and Pyeongtaek semiconductor clusters, the government will support 70% of the corporate burden of the underground power network project with national funds. An additional 100 billion won will be newly allocated to this project. The support ratio and limit for specialized areas in advanced strategic businesses will also be significantly expanded, with government funding increasing from 30 billion won to 140 billion won.
In the supply chain sector, new investment subsidies (100 billion won) will be established for companies related to advanced strategic industries, including materials, parts, and equipment. Investments related to site and facilities will also receive support of 30% to 50% of the amount. The limit is set at 15 billion won per case and 20 billion won per corporation.
The financial support sector will also be expanded. This year, the low-interest program for semiconductor facility investments will be increased from 4.3 trillion won to 7.7 trillion won. The total supply scale for 2025 to 2027 will also be expanded from 17 trillion won to 20 trillion won.
In addition, to improve accessibility to semiconductor education, two new semiconductor academies will be established outside the capital area, and fabless corporations will also be able to utilize high-cost AI semiconductor demonstration equipment, with two new types of equipment built at approximately 1.2 billion won each.