South Korea announced plans to create a 50 trillion won ($34.4 billion) fund to bolster high-tech strategic industries, including semiconductors, batteries, and artificial intelligence, in a bid to enhance the country’s long-term competitiveness. The government aims to provide over 100 trillion won in financial support through the Korea Development Bank and other commercial banks.
The 50 trillion won fund will be established under the KDB, Acting President Choi Sang-mok said at a meeting of economy-related ministers on Mar. 5. The fund seeks to strengthen advanced industries such as semiconductors, secondary batteries, AI, defense, display, and robotics.
The fund will be raised by issuing government-guaranteed bonds, and the KDB will cover its operating expenses, including administrative and interest costs.
“Securing leadership in advanced technologies requires bold, large-scale investments,” Choi said. “We will provide broad support to large corporations and small and medium-sized firms across key strategic industries, including chips, AI, secondary batteries, and biotechnology.”
The government expects to offer over 100 trillion won in financial support through this fund. Unlike existing programs, the fund will provide ultra-low-interest loans at rates similar to government bonds. The government is also considering forming special purpose corporations (SPCs) with private companies to jointly invest in large-scale facilities such as semiconductor fabs. In such cases, the government would hold a stake in the SPC to support major infrastructure projects.
The plan, however, requires parliamentary approval to move forward. Since the main opposition Democratic Party of Korea holds a majority in the National Assembly, the government needs the party’s consent. To fund the initiative by issuing government-backed bonds, the Korea Development Bank Act must also be amended. The government plans to submit these legislative revisions within March.
“With geopolitical uncertainties rising under the new U.S. administration, high-tech industries have become central to economic security” a government official said. “Swift legislative action is needed to ensure South Korea remains competitive.”
