South Korea announced on Tuesday an increase in its support package for the nation’s crucial semiconductor industry to 33 trillion won ($23.25 billion), marking a rise of approximately a quarter from the 26 trillion won package revealed last year.
The government stated that these measures are a response to calls for increased support amidst growing policy uncertainty under the current U.S. administration and escalating competition from Chinese rivals.
Seoul will also expand a financial assistance program for the chips industry to 20 trillion won, an increase from the previous 17 trillion won, according to a joint statement from various ministries, including the trade ministry.
South Korea’s decision to inject more funds into its key chips sector is intended to assist companies in managing higher costs as they compete globally, the statement noted.
Asia’s fourth-largest economy is home to the world’s leading memory chip manufacturers, Samsung Electronics and SK Hynix, although they have lagged behind some competitors in areas like chip design and contract chip manufacturing.
In 2024, South Korea’s semiconductor exports reached $141.9 billion, accounting for 21% of the country’s total exports, government data indicated. Shipments to China and the United States amounted to $46.6 billion and $10.7 billion, respectively.
U.S. President Donald Trump stated on Sunday that he would announce the tariff rate on imported semiconductors within the next week, adding that some flexibility would be considered for certain companies in the sector.
During a meeting held on Tuesday following the announcement, Finance Minister Choi Sang-mok said that the government would actively consult with the U.S. regarding its Section 232 investigations into semiconductor and biopharmaceutical imports to minimize any negative impact on domestic companies.
Last week, South Korea announced emergency support measures for its auto sector, aiming to mitigate the impact of potential U.S. tariffs on a sector that has experienced years of sharply increasing exports to the United States.
These measures include financial support for the auto industry, as well as tax reductions and subsidies to stimulate domestic demand, while the government also pledged efforts to negotiate with the U.S. and facilitate market expansion.
