Starting in July, the South Korean government will initiate an 18 trillion won ($12.94 billion) +α investment program to facilitate financing for semiconductor companies. By 2027, the government plans to invest up to 2 trillion won (1 trillion won in cash and 1 trillion won in kind) into the Korea Development Bank to establish a 17 trillion won ($12.22 billion) low-interest loan program, with lending set to begin next month.
The government announced the “comprehensive support package” at an economy-related ministers’ meeting on June 26. The plan details the comprehensive support package worth 26 trillion won announced by President Yoon Suk-yeol last month. It is designed to bolster the semiconductor industry amid intensifying global competition.
The financial support program, worth 18 trillion won, will begin next month, offering preferential interest rates of 0.8 to 1.0 percentage points for large companies and 1.2 to 1.5 percentage points for small and medium-sized companies, compared to regular industrial bank loans.
Additionally, the government will raise up to 800 billion won ($575.66 million) for the new semiconductor ecosystem fund by 2027. By next year, the fund plans to accumulate 300 billion won and will start making equity investments in materials, components, equipment, and fabless (semiconductor design) companies beginning next month.
The government is also working to extend the tax credit scheme to develop national strategic technologies by three years. This scheme was initially set to expire at the end of this year.
Incorporating advanced semiconductor materials, components, and equipment-related technologies into the national strategic technologies list is also under consideration. Additionally, revisions to the Enforcement Decree of the Restriction of Special Taxation Act are planned to extend tax benefits to include software rental and purchase costs, as well as rental and usage fees for research and testing facilities.
To enhance the overall competitiveness of the semiconductor ecosystem, the government will invest 5 trillion won in R&D, commercialization, and human resource development from next year until 2027. Additionally, the AI (artificial intelligence) computing infrastructure will be expanded to strengthen the foundation for the demonstration and commercialization of advanced semiconductors, including AI semiconductors.
Furthermore, to expedite the expansion project of National Route 45, which runs through the Yongin National Industrial Complex site, the government will waive the preliminary feasibility study and provide national funding. The government will also seek an exemption from the preliminary feasibility study for the construction of an integrated double-track pipeline to supply water to both the National and General Industrial Complexes. To ensure the stability of the Yongin National Industrial Complex, a phased power supply strategy will be implemented. In the first phase, an LNG power plant will be built within the industrial complex, generating 3GW of electricity. In the second phase, long-distance transmission lines will be constructed.
