SEOUL – South Korea plans to roll out 14 trillion won ($10 billion) in low-interest loans next year to support its semiconductor industry, the finance ministry announced on Monday, citing challenges from Chinese competition and uncertainties surrounding the potential new U.S. administration.
The financial support will be distributed through state-run banks, including 1.8 trillion won earmarked for power transmission infrastructure at a new chip complex. The investment targets the development of a massive chip manufacturing cluster in Yongin and Pyeongtaek, south of Seoul, which is being promoted as the world’s largest high-tech chipmaking hub.
Industry Context
South Korea, home to global memory chip leaders Samsung Electronics and SK Hynix, is responding to rapid advancements in China’s semiconductor industry and potential policy shifts in the United States. The government emphasized its commitment to mobilizing resources to help companies navigate industry challenges.
Potential Challenges
The ministry highlighted concerns about:
- Reduced investment incentives in the United States
- Potential changes to existing acts like the Inflation Reduction Act and Chips and Science Act
- Possibility of broader tariffs
- Increasing competition from Chinese semiconductor manufacturers
Samsung Electronics has already reported that rising chip supplies from Chinese rivals impacted its third-quarter earnings, underscoring the industry’s competitive landscape.
($1 = 1,397.3600 won)
