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Starting in July, the South Korean government will launch an 18 trillion won ($12.94 billion) investment initiative to support semiconductor companies. By 2027, the government aims to invest up to 2 trillion won into the Korea Development Bank, creating a 17 trillion won ($12.22 billion) low-interest loan program, with lending commencing next month.

Finance Minister Choi Sang-mok speaks during an economy-related ministers' meeting at Government Complex Seoul, Jongno District, June 26

The comprehensive support package, announced on June 26 at an economy-related ministers' meeting, follows President Yoon Suk-yeol's 26 trillion won support plan unveiled last month, aimed at boosting the semiconductor industry amid growing global competition.

The 18 trillion won financial support program will start next month, offering preferential interest rates of 0.8 to 1.0 percentage points for large companies and 1.2 to 1.5 percentage points for small and medium-sized companies, compared to regular industrial bank loans.

The government will also raise up to 800 billion won ($575.66 million) for a new semiconductor ecosystem fund by 2027. The fund aims to gather 300 billion won by next year and begin equity investments in materials, components, equipment, and fabless (semiconductor design) companies from next month.

Additionally, the government plans to extend the tax credit scheme for national strategic technologies by three years and is considering adding advanced semiconductor materials, components, and equipment-related technologies to the national strategic technologies list. Revisions to the Enforcement Decree of the Restriction of Special Taxation Act are underway to extend tax benefits to include software rental and purchase costs, as well as rental and usage fees for research and testing facilities.

To further enhance the semiconductor ecosystem's competitiveness, the government will invest 5 trillion won in R&D, commercialization, and human resource development from next year until 2027. Furthermore, the AI computing infrastructure will be expanded to support the demonstration and commercialization of advanced semiconductors, including AI semiconductors.

Editor：Lulu

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