SEOUL: The South Korean government has announced a significant boost in support for its critical semiconductor sector, raising its industry package to 33 trillion won (US$23.25 billion or RM102.6 billion), up from 26 trillion won a year earlier. The increase comes as global chipmakers face mounting geopolitical and economic headwinds, including uncertainty over US trade policies and intensifying competition from China.
In a joint statement issued on Tuesday by several ministries, including the Ministry of Trade, Industry and Energy, the government outlined its commitment to reinforcing the financial backbone of South Korea’s chipmakers. Notably, financial assistance under the programme will grow to 20 trillion won from the previously announced 17 trillion won, providing much-needed capital to an industry grappling with rising production costs and a shifting global landscape.
This strategic move highlights Seoul’s intent to secure its position in the global semiconductor value chain. Although South Korea leads in memory chip production through major players such as Samsung Electronics and SK Hynix, the nation has lagged behind in areas like chip design and foundry services, where firms from the United States and Taiwan currently dominate.
Semiconductors remain a cornerstone of South Korea’s economy. In 2024, chip exports totalled US$141.9 billion, representing 21% of total national exports. China and the United States remain the largest markets, with shipments valued at US$46.6 billion and US$10.7 billion respectively.
The announcement also comes amid renewed trade tensions. US President Donald Trump stated over the weekend that his administration would soon reveal new tariff rates on imported semiconductors, with potential exemptions for select companies. This has prompted concerns across global supply chains and accelerated calls for stronger domestic industrial support in South Korea.
The latest chip package follows a similar initiative targeting the automotive sector, which also faces tariff pressures from the US. Last week, Seoul revealed emergency measures to cushion the automotive industry, including financial aid, tax incentives, and subsidies to stimulate local demand. The government has also pledged to engage in active dialogue with Washington to mitigate the impact on key Korean exports.
By reinforcing its high-tech sectors, South Korea is positioning itself to navigate a more protectionist global trade environment while maintaining its status as a key player in the semiconductor race.
