President Yoon Calls for Increase in Investment Incentives
The Ministry of Trade, Industry and Energy and the Ministry of Economy and Finance recently discussed tax credit expansion from 8 percent to 16 percent regarding investments in national strategic technologies. The latter is likely to announce its decision in the near future.
At present, it is advocating the current level of 8 percent, saying that a higher figure will lead to a decrease in tax revenue. However, President Yoon Suk-yeol recently called for an increase in investment incentives related to the technologies.
Increasing global protectionism in the semiconductor industry is why the president did so. For example, the U.S. CHIPS and Science Act was enacted last year so that a 25 percent tax credit can be applied to companies building semiconductor plants in the United States and US$52 billion subsidies can be invested for five years to come in facility construction and expansion in the U.S. semiconductor sector.
TSMC is building a semiconductor plant in Kumamoto, Japan, and the Japanese government is bearing 40 percent of the total cost. European governments, including German and French, are also providing a variety of incentives to attract more investment in the industry.