Korea to expand semiconductor incentives as US, Japan gain ground
The government will reduce red tape and provide incentives to accelerate the establishment of chip complexes being built here by major companies such as Samsung Electronics and SK hynix, aiming to secure the country’s competitiveness amidst increased support from the U.S. and Japan to enhance their chip technology capabilities, the industry minister said Monday.
“Currently, we will swiftly proceed with related permits to shorten the project period of semiconductor industrial complexes under construction, and greatly expand incentives to stimulate investment by semiconductor companies,” Industry Minister Ahn Duk-geun said during a meeting with CEOs of local chip companies in Seoul.
The industry minister held a meeting with representatives of semiconductor manufacturing, materials, parts and equipment companies to increase the competitiveness of Korea’s semiconductor industry, in relation to the major conveniences such as the expansion of incentives that advanced countries, such as the U.S. and Japan, are providing to increase their domestic semiconductor competitiveness.
The U.S. and Japan have recently been reassessing and the competitiveness of their domestic semiconductor industries and making appropriate changes. Washington is reportedly planning to provide over $10 billion in subsidies to U.S. chip giant Intel, which is looking to restart its foundry business, to expand its semiconductor production facilities on American soil.
On Saturday, Taiwan’s foundry business giant TSMC opened its foundry plant in Kumamoto, Japan, just two years after breaking ground on its construction. The reason why construction of the factory, which usually would take about five years, was completed so quickly is because the Japanese government provided various supports, including a subsidy of 476 billion yen ($31.7 billion), almost half of the construction cost of 1 trillion yen.
In response to the global countries’ movements, the minister said that the government will establish a task force responsible for tasks related to the chip complexes, and open a hotline with major domestic semiconductor companies.
In addition, the industry ministry will announce a comprehensive support plan for the chip complexes, which includes additional investment incentive expansion plans for semiconductors and other advanced industries next month. Also, by June, it plans to establish a nurturing plan to foster a worldclass chip design company, like Nvidia, in Korea.
“We will establish a dedicated task force in the ministry for promoting the specialized semiconductor complex systematically and without fail,” Ahn said. “We will establish a hotline with various CEOs to quickly resolve the current issues of semiconductor companies.”
Participants in the meeting included representatives from prominent domestic semiconductor companies, including Samsung Electronics CEO Kyung Kye-hyun, SK hynix CEO Kwak Noh-jung, Wonik IPS CEO Ahn Tae-hyuk, Dongjin Semichem CEO Lee Joon-hyuk and Soulbrain CEO Chung Hyun-suk.
During the meeting, the participating CEOs also pledged to proceed with the scheduled investment without a hitch and to strive with the government to achieve 60 trillion won in semiconductor investments and $120 billion in exports this year.
They also suggested improving the investment environment, including the establishment of investment subsidies, expansion of support for mega-cluster-based facilities and construction of test facilities for small and medium-sized companies.
The industry ministry added it plans to sign a business agreement on Tuesday with Korea Electric Power Corp., Korea Land & Housing Corporation and power generation companies to quickly implement essential infrastructure construction such as electricity and water supply according to the power supply plan for the Yongin chip complex.