In today's increasingly fierce competition in the global semiconductor industry, a large-scale financial investment by the South Korean government has attracted widespread attention. In 2024, the South Korean government announced that it would provide more than 14 trillion won (about 72.688 billion yuan) of policy financing to support its domestic semiconductor industry. This decision not only shows South Korea's strategic ambitions in the global semiconductor industry chain, but also reflects its sense of urgency and foresight in the context of the Sino-US technology game.
1. The scale and impact of policy-based financing
The South Korean government's financial support program covers a wide range of semiconductor sectors, including materials, parts, equipment, and fabless. This all-round support is expected to greatly promote the overall development of the Korean semiconductor industry. Especially in the context of the current restructuring of the global semiconductor supply chain, this move by the South Korean government is undoubtedly to strengthen the competitiveness of the industry internally and show its position in the global semiconductor industry that cannot be ignored externally.
2. Low-interest loans and the establishment of new funds
In addition to policy financing, the South Korean government also plans to provide 4.25 trillion won (about 22.066 billion yuan) of low-interest loans through the Korea Development Bank, and plans to establish a new semiconductor ecosystem fund worth 120 billion won (about 623 million yuan), which will be expanded to 420 billion won (about 2.181 billion yuan) in the future. The injection of these funds will provide strong financial support for the R&D and innovation of the Korean semiconductor industry, which will help shorten the technological gap with leading countries and accelerate technological breakthroughs.
Figure: Can the South Korean government's 72.6 billion yuan investment in the semiconductor industry shake the global pattern?
3. Construction of semiconductor industry clusters
South Korea plans to build large-scale semiconductor industrial clusters in Yongin and Pyeongtaek, Gyeonggi Province, and the government has pledged to bear most of the 1.8 trillion won (9.371 billion yuan) needed to build underground transmission networks for these two industrial clusters. The construction of this infrastructure will provide a solid power guarantee for the high energy-consuming characteristics of the semiconductor industry, and will also attract more domestic and foreign investment to form an industrial agglomeration effect.
4. Tax Credits and Talent Training
The South Korean government will also work with the National Assembly to include investment in R&D facilities, including R&D equipment, in the scope of the national strategic technology investment tax credit, and increase the tax credit rate applicable to semiconductor companies. In addition, the South Korean government will also strengthen the cultivation of semiconductor talents and attract overseas talents to South Korea; In 2025, it will provide preferential tariffs on key materials for semiconductor manufacturing, such as quartz glass plates, CCL copper clad laminates, glass fibers, and tin ingots.
5. the market and competition pattern
According to a report by the Semiconductor Industry Association (SIA) and the Boston Consulting Group (BCG), South Korea's share of global semiconductor production is expected to reach 19% in 2032, jumping to second in the world, behind Chinese mainland (21%) and ahead of Taiwan (17%) and the United States (14%). This forecast shows the broad prospects of the global semiconductor market and also indicates the huge potential of the Korean semiconductor industry in the global market.
6. Personal views and observations
From my personal observation, the South Korean government's financial support plan is not only a reflection of strengthening the competitiveness of the industry internally, but also an important measure to demonstrate its strategic position in the global semiconductor industry. Against the backdrop of the U.S.-China technology game, South Korea's decision shows its recognition of the importance of the semiconductor industry and its determination to remain competitive in the global industrial chain. At the same time, it also provides a reference for other countries that in the globalized semiconductor industry, government support is essential for the development of the industry.
7. Conclusions
This financial support plan of the South Korean government will undoubtedly have a profound impact on the competitive landscape of the global semiconductor industry. Through all-round financial support, South Korea has not only strengthened its leading position in the domestic semiconductor industry, but also injected new vitality into the development of the global semiconductor industry. With the growing global demand for clean energy and electric vehicles, the development and utilization of semiconductor resources will be the key to future energy competition. The success of this cooperation heralds a new era in the development of the global semiconductor industry. The South Korean government's investment of 72.6 billion yuan has the potential to shake up the global semiconductor industry pattern and make it an important pole in the global semiconductor industry chain.
