Amid the payment of massive subsidies by the United States and Japan for the revival of the semiconductor industry, the government has decided to review the provision of subsidies to the nation’s high-tech industries, including semiconductors. This marks the first official mention by the government regarding the payment of subsidies.
On March. 27, the government discussed a comprehensive support plan for specialized clusters in advanced strategic industries based on such proposals at the 5th National Advanced Strategic Industry Committee held at the Government Complex in Seoul and chaired by Prime Minister Han Duck-soo. The government stated, “The competition for investment subsidies among rival countries is intensifying,” and added, “In addition to the current investment incentive support, we will continue to review the expansion of incentive systems for advanced investments.”
The review of investment incentives includes the payment of semiconductor subsidies, taking a step beyond merely supporting private investments from behind. A high-ranking government official mentioned, “The final possibility of realization should be seen as fifty-fifty,” but also noted, “Extending the investment tax deduction for semiconductors, which expires at the end of the year, is basic, and we are reviewing the payment of subsidies.”
Currently, South Korea does not have separate semiconductor subsidies, only providing up to a 25% investment tax deduction for national strategic technologies.
Furthermore, the government has decided to actively support private investments within specialized clusters for advanced strategic industries, which are expected to require an investment of 681 trillion won by 2047. This year, the government plans to increase the budget for semiconductor sector support to 1.3 trillion won and to concentrate on supporting infrastructure and investment environments, ecosystems, ultra-leading technologies, and talent development.