South Korea steps up support for domestic semiconductor industry

Large-scale changes in the sphere of international trade, provoked by the actions of the US authorities, are forcing governments of other countries to provide measures to support their national economies. South Korea has increased the size of subsidies allocated to support the country’s semiconductor industry by almost a quarter to $23.25 billion.

Image Source: Samsung Electronics

At least, that’s the amount that will be discussed this year, Reuters reports. On the one hand, South Korea’s backbone semiconductor industry is being squeezed by U.S. import duties and export controls. On the other hand, Korean manufacturers are being squeezed by Chinese competitors, who are developing by leaps and bounds.

In addition to the $23.25 billion in non-refundable subsidies, South Korean chipmakers will have access to a preferential credit line of about $14 billion, which has also been increased by almost 18% compared to last year. South Korea is home to two of the world’s largest memory makers, Samsung Electronics and SK hynix, with the latter recently becoming the world’s leader in DRAM revenue due to its dominance in the HBM market.

Last year, semiconductor products accounted for 21% of all South Korean exports, reaching $141.9 billion. At the same time, $46.6 billion worth of products were sent to China, while the US was limited to $10.7 billion, but this imbalance can be easily explained by the concentration of production in China. The South Korean authorities have already expressed their readiness to actively cooperate with the US investigation, which aims to identify vulnerabilities in the supply chains of semiconductor components from a national security perspective. Last week, South Korea announced a package of measures to provide emergency support for the national auto industry, since this type of product will also suffer from the introduction of increased import duties in the US. Among other things, subsidies are provided to stimulate demand for vehicles within South Korea.