Korea to ease ownership rules to boost chip industry

The South Korean government has decided to partially relax financial-industrial separation rules for the semiconductor sector. The plan introduces special exemptions tied to expanded regional investment, easing ownership restrictions on great-grandchild affiliates of general holding companies and allowing them to own financial leasing firms to support large-scale corporate investment in advanced industries.

The Ministry of Economy and Finance unveiled the plan during a presidential policy briefing on Dec. 11 at the Sejong Convention Center in Sejong. The ministry said the move aims to stimulate investment in advanced industries and bolster export support as part of broader efforts to lift the country’s declining potential growth rate. It added that special holding company exemptions linked to regional investment will back major semiconductor projects by Samsung Electronics, SK hynix and other leading firms.

The government will ease the requirement that a general holding company’s grandchild firm must hold a 100 percent stake in a semiconductor subsidiary, lowering the threshold to 50 percent. In addition, it plans to permit general holding companies to own financial leasing firms on a limited basis, despite current law barring them from holding financial affiliates.

Authorities also aim to boost export support for domestic companies as global trade competition grows increasingly fierce. To prevent the benefits from being concentrated among a small number of firms, the government will reclaim a portion of profits earned by companies receiving fiscal assistance and set up a Strategic Export Finance Fund, a tentative name, to redistribute those gains.

The full round of policy briefings that began the same day is being broadcast live for the first time, highlighting President Lee Jae-myung’s push for greater transparency in national governance. Lee said the nation’s fate hinges on the attitude, competence and diligence of public officials, stressing that the success or failure of government often rests on their performance. He added that the ultimate responsibility lies with the top leader, emphasizing that the person in the highest office carries the heaviest burden.


Ae-Jin Ju jaj@donga.com