President Yoon Suk Yeol announced on May 23 a 26 trillion won support package consisting of financial, infrastructure, R&D, and aid for SMEs and MMEs in the semiconductor industry. 

The support package includes 17 trillion won from the Korea Development Bank (KDB) to establish a semiconductor financial aid program, creation of a 1 trillion won semiconductor ecosystem fund, extension of tax credits set to expire at the end of the year, and development of a semiconductor megacluster. 

President Yoon presided over the 2nd Economic Issues Review Meeting in the conference room of the Office of the President to discuss the current issues in semiconductors. 

President Yoon’s emphasis during his opening remarks at the Meeting was that ‘the semiconductor industry, a total national effort, is a foundation for enriching the livelihoods of the people and advancing our country’s economy, and not about tax cuts for large corporations or the rich.’ 

 

▲ President Yoon presides over the Semiconductor Current Issues Meeting, gives his opening remarks. 2024.04.09 / Photo provided by the Office of the President. 

During his opening remarks, President Yoon stated, “A total national effort is being deployed in the semiconductor sector,” and “Who will first make cutting-edge semiconductors with high levels of information processing capabilities will decide the outcome of the race, thus our nation should firmly support the semiconductor industry to ensure that we do not fall behind competing nations.”

President Yoon emphasized that “We discussed during the semiconductor current issues emergency review meeting held after the earthquake disaster in Taiwan last April 9, support for the local companies,” and that “We created a 26 trillion won worth of comprehensive support program for the semiconductor industry, consisting of financial, infrastructure, R&D, and support for SMEs and MMEs.”

Yoon further explained, “We will first establish a semiconductor financial support program worth 17 trillion won through the KDB,” and that “Companies face liquidity issues when investing vast amounts of money to build new factories and expand new factory lines. The support program from the KDB will alleviate some of these difficulties.” 

He also pledged, “Tax credits are essentially the same thing as subsidies in a sense that the nation is refunding a certain proportion of R&D and equipment investments,” adding “We will extend the tax credits, which were set to expire at the end of the year, so that companies do not face difficulties in R&D and equipment investments.”

President Yoon firmly stated that “We will accelerate the establishment of a semiconductor mega cluster,” and “Time is money, and the speed of the response to issues is crucial. Especially the public sector will take charge in matters of infrastructure relating to electricity, water, and road, and will swiftly proceed with the development.” 

He stressed, “Providing a stable and high-quality electricity during semiconductor manufacturing is the most important factor,” calling for “Cooperation with the National Assembly for a swift passage of the National Grid Special Law related to significantly reducing the construction period of electricity transmission lines.” 

President Yoon stated during his opening remarks, “We should also focus on strengthening the semiconductor industry ecosystem,” saying “A special aid program for the fabless companies, the material/component/equipment (MCE) companies, and semiconductor SMEs, and MMEs will be implemented.”

He added, “We will establish a semiconductor ecosystem fund worth 1 trillion won to support prospective fabless and MCE companies, which will enable them to grow into global companies,” and that “Infrastructures like mini-fabs, which can be jointly utilized by many users, will be swiftly established to the levels desired by businesses.”

However, President Yoon criticized the ‘opposing voices’ regarding the support for the semiconductor industry, saying “Although some people say that the support from the government for the semiconductor industry is a tax cut for the large industries and the wealthy, the semiconductor industry is the most important and concrete base for enriching the livelihood of the people and boosting our country’s economy.” 

President Yoon stated, “More than 70% of the semiconductor industry comprehensive support program will be benefiting the SMEs and MMEs,” and that “When companies increase investments owing from tax credits, the semiconductor industry ecosystem will be expanded, leading to more revenue for the companies, and more high-quality jobs for the people.”

He further explained, “As the people’s livelihoods improve and the tax revenues ultimately increase, a virtuous cycle between the economy and the industry is formed,” adding “Giving tax cuts as a form of subsidies doesn’t lead to deficits in the tax revenue, rather it creates other forms of tax revenue, ultimately expanding the size of our economy and enhancing the tax revenue.” 

President Yoon emphasized during the meeting, “Semiconductor are the people’s livelihood, and supporting the semiconductor industry is for the benefit of the people,” saying “Each ministry should diligently oversee the seamless implementation of the semiconductor comprehensive support program, and the ministers should meet with the ruling and the opposition parties to explain the program and ask for their support.”

President Yoon also emphasized to the Ministry of Trade, Industry and Energy (MOTIE), saying “MOTIE should come up with a brilliant measure to fortify the competitiveness of the system semiconductor in collaboration with relevant ministries and companies. Various countries around the world are betting their future on semiconductors.” 

He added, “This is essentially an industrial war. I will personally handle problems which require a diplomatic solution,” whilst calling for support from various government-related ministries. 

The following government officials attended the meeting: Deputy Prime Minister and Minister of Economy and Finance, Choi Sang-mok, Minister of Trade, Industry and Energy, Anh Deok-geun, Minister of Science and ICT, Lee Jong-ho, Minister of Environment, Han Hwajin, Minister of Land, Infrastructure and Transport, Park Sang-woo, and Chairman of the Finalcial Services Commission, Kim Joo-hyun. The following members from the Office of the President attended the meeting: Director of National Policy Sung Tae-yoon, Senior Secretary to the President for Economic Affairs, Park Chun-seop, Senior Secretary to the President for Science and Technology, Park Sang-wook, and Third Deputy Director of National Security, Wang Yoon-jong. 

Written by Kim Gyu Tae

Translated by Lee Dong Jae