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Korea To Give Government Support To Bolster Chip Manufacturing

Following America’s huge investment in local chip manufacturers, South Korea is now planning a bill on the local semiconductor industry which will give tax breaks, 40 per cent investment tax credits for machinery costs, and other such benefits.

South Korea are the world leaders in memory chip producers, home to Samsung Electronics and SK hynix. The industry makes up 20 per cent of the country’s export trade. This marks the first time South Korea has enacted a bill for this industry.

“The semiconductor sector is our nation’s core national strategic industry, which our economy’s present and future depend on. We must continue to lead the global semiconductor supply chain,” President Moon Jae-in said today.

“Up until now, the Korean government’s policies focused more on small chip-related firms rather than on large chipmakers like Samsung and SK hynix,” Lee Chang-han, Vice Chairman of Korea Semiconductor Industry Association, told The Korea Herald.

“The government should find concrete measures to strengthen the industry’s ecosystem this time by formulating effective policies that benefit various segments of the industry, ranging from materials, equipment to chip design,” he said, adding that the KSIA are calling for a 50 per cent tax credit for manufacturing facilities.

Another issue is lack of manpower in the factories, something that Chang-han feels the government should also move to tackle.

“Among others, workforce supply is a problem than can definitely be addressed by the government.”

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