Seoul: South Korea has announced a comprehensive package of support measures for its semiconductor industry in response to potential shifts in U.S. trade policy under the incoming Donald Trump administration. The country's top economic policymaker, Finance Minister Choi Sang-mok, emphasized the "growing headwinds" faced by the industry during a meeting with economy-related ministers.According to Yonhap News Agency, the meeting was aimed at enhancing the global competitiveness of local industries. Finance Minister Choi highlighted the urgency of the situation, stating, "The next six months will be the 'golden time' that will decide the fate of our industries." He noted that the government must transition from being a 'supporter' to a 'player' alongside businesses, given the challenges posed by global economic shifts, competition from emerging countries, and the reorganization of global supply chains.South Korea, home to leading global memory chipmakers Samsung Electronics Co. and SK hynix Inc., is facing u ncertainties due to possible tariff increases and changes in U.S. industrial policy. Trump has indicated plans to impose tariffs of up to 20 percent on all imports and roll back subsidies for semiconductors and electric vehicles, originally introduced under the Joe Biden administration.In response, Seoul plans to provide financial assistance, tax incentives, and other support measures to bolster the semiconductor ecosystem. The government aims to alleviate the financial burden on semiconductor companies by subsidizing around 60 percent of the 3 trillion won (US$2.14 billion) needed for building transmission infrastructure for semiconductor clusters in Yongin and Pyeongtaek, located 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 mentioned. The industry ministry also stated that efforts will be accelerated to establish infrastructure for the Yongin cluster, capable of providing 10 gigawatt-hours of electricity a nd 1.33 million tons of water daily, with operations expected to begin in 2027.Additionally, tax deductions for research and development and facility investments in the semiconductor industry will be increased. Currently, large and midsized companies receive a 15 percent tax deduction, while small businesses enjoy a 25 percent deduction under the national strategic technology framework. For 2025, the government has set aside over 14 trillion won for policy financing programs, including low-interest loans and other financial support for semiconductor manufacturers.To address workforce challenges, the government plans to expand graduate programs specializing in semiconductors and explore ways to attract more foreign talent, as stated by the finance ministry.
- October 12, 2026
