South Korea has unveiled an increased support package worth 33 trillion won ($23.25 billion) for its semiconductor industry, raising the amount by a quarter from last year’s 26 trillion won package.
This decision is in response to growing concerns about policy uncertainty under the current U.S. administration and heightened competition from Chinese chipmakers. The government will also enhance its financial aid program for the semiconductor sector, boosting it to 20 trillion won, up from the previous 17 trillion won.
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The additional support aims to help South Korean semiconductor companies, like Samsung Electronics and SK Hynix, manage rising costs while competing globally.
Despite being leaders in memory chip production, these companies face challenges in areas such as chip design and contract manufacturing. In 2024, semiconductor exports accounted for 21% of South Korea’s total exports, with the U.S. and China being significant markets.
The U.S. has signaled it will soon announce tariff rates on imported semiconductors, which has prompted South Korea to consult actively with the U.S. to mitigate any negative impact. This move follows emergency measures for South Korea’s auto sector in response to rising U.S. tariffs on cars. These measures include financial aid, tax cuts, and efforts to expand export markets.
