Seoul: South Korea unveiled a comprehensive package of support measures for its semiconductor industry on Wednesday, with Finance Minister Choi Sang-mok emphasizing the "growing headwinds" facing the sector due to potential shifts in U.S. trade policy under the incoming Donald Trump administration. The announcement was made during a meeting with economy-related ministers, where Choi highlighted the importance of the next six months as a decisive period for the country's industries.According to Yonhap News Agency, Finance Minister Choi stated that, given the current challenges such as global economic shifts under the new U.S. administration, increasing competition from emerging countries, and the rapid reorganization of global supply chains, the government's role must transition from merely supporting to actively collaborating with businesses. South Korea, home to leading global memory chipmakers Samsung Electronics Co. and SK hynix Inc., is facing uncertainties over potential tariffs and policy changes in t he U.S. that could significantly impact the semiconductor sector.Trump has indicated plans to impose tariffs of up to 20 percent on all imports and has shown intentions to roll back subsidies for semiconductors and electric vehicles introduced under the Joe Biden administration. In response, Seoul plans to offer various forms of support to South Korean semiconductor firms, including financial assistance and tax incentives, to strengthen the semiconductor ecosystem, according to the finance ministry.The government plans to ease the financial burden on semiconductor companies by subsidizing around 60 percent of the 3 trillion won (US$2.14 billion) needed to build transmission infrastructure for semiconductor clusters in Yongin and Pyeongtaek, approximately 65 kilometers south of Seoul. "The final share of government support is still under review but will likely exceed half of the total cost," a ministry official said.Additionally, tax deductions for research and development (R and D) and facility investme nts in the semiconductor industry will be increased. Currently, large and midsized companies benefit from a 15 percent tax deduction, while small businesses receive a 25 percent deduction under the national strategic technology framework. For 2025, the government has earmarked over 14 trillion won for policy financing programs, including low-interest loans and other financial support for semiconductor manufacturers.To address workforce challenges in the industry, the government plans to expand graduate programs specializing in semiconductors and explore ways to attract more foreign talent, the ministry stated.
- October 12, 2026
