Gov’t considers subsidies for semiconductor manufacturers

The government is considering offering subsidies to semiconductor manufacturers. Unlike the U.S. and Japan, which provide significant subsidies to attract semiconductor investments, South Korea supports the semiconductor industry through tax credits for investments made in the sector. South Korea's deliberation aims to enhance incentives to attract semiconductor manufacturers to the country.

On Wednesday, the government held the Fifth National High-Tech Strategic Industry Committee meeting, which discussed and approved comprehensive support measures for high-tech strategic industries. These measures include strengthening incentives for investments in companies located in specialized complexes.

“The South Korean government is continuously exploring ways to expand investment incentives, particularly targeting companies relocating to specialized complexes,” a government official said. “This comes amid heightened competition for investment subsidies with other countries. “Subsidies to semiconductor manufacturers are among the measures under consideration.”

The competition to provide subsidies to semiconductor companies, which originated in the United States, has now escalated to a state-level competition. This has prompted the South Korean government to review its subsidy measures. Recently, the U.S. government announced an $850 million subsidy for Intel.

"A consensus seems to have been reached on the importance of tax credits and direct subsidies for semiconductor companies, which require ongoing and substantial investments. There is recognition of the direct link between the semiconductor industry and economic security," a semiconductor industry official commented.


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