Korean Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok announced a bold initiative to enhance the competitiveness of the semiconductor sector during an industry meeting at HPSP in Hwaseong-si. Emphasizing the crucial role of a robust semiconductor ecosystem, Choi revealed plans for a support program exceeding 10 trillion won ($7.3 billion), aimed at bolstering facility investment and research and development (R&D) across all semiconductor fields.
The government intends to secure the substantial funding through a combination of policy finance from institutions like the Korea Development Bank and private investments. Rather than direct financial assistance, the focus will be on indirect support mechanisms like loans or guarantees to stimulate growth and innovation.
Highlighting the importance of semiconductor back-end processes, Choi underscored the government’s commitment to channel investments into this critical area. This includes support for the post-processing phase, crucial for packaging chips and ensuring their functionality.
Currently, the government provides policy financing worth approximately 3.6 trillion won to the semiconductor industry through government-run banks. Additionally, major players like Samsung Electronics and SK Hynix have joined hands with the government to invest in a semiconductor ecosystem fund aimed at materials, parts, equipment, and fabless sectors.
Choi reiterated the significance of semiconductors in driving economic growth, particularly in the context of the burgeoning artificial intelligence (AI) sector. However, he cautioned against direct subsidies, instead advocating for targeted support through taxation and financial mechanisms.
Looking ahead, Choi outlined plans to extend tax credits and incentives to incentivize R&D investment, stressing the need for collaboration with the private sector and academia. Initiatives include extending the sunset of the national strategic technology investment tax credit and expanding the scope of the R&D tax credit.
In conclusion, Choi affirmed the government’s commitment to advancing high-tech packaging projects and expediting preliminary feasibility studies to support the development of cutting-edge packaging technology.
The ambitious plan reflects the government’s determination to solidify South Korea’s position as a global semiconductor powerhouse, fostering innovation and competitiveness in this critical industry.
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