The government announced the ‘Semiconductor Ecosystem Support Package’ at the Ministerial Meeting on Economic Affairs on June 26. This plan materializes the direction of support package worth 26 trillion won, which was announced at the 2nd Economic Issue Review Meeting on May 23, and focuses on enhancing the competitiveness of the entire semiconductor ecosystem to ensure that Korea secures a leading position in the global semiconductor competition.
Above all, in an effort to facilitate investment financing for semiconductor companies, an 18.1 trillion won (+α) “Semiconductor Financial Support Program” will be launched immediately from July. Up to 2 trillion won (1 trillion won in cash + 1 trillion won in kind) will be invested in the Industrial Bank of Korea by 2027 to establish a 17 trillion won low-interest loan program, with loans to semiconductor companies starting next month. Compared to regular industrial bank loans, large corporations will receive preferential interest rates of -0.8 to -1.0%p, and SMEs and middle market enterprises will receive -1.2 to -1.5%p, offering the lowest interest rates in the market.
In addition, a new semiconductor ecosystem fund of up to 800 billion won will be launched by 2027, expanding the total semiconductor ecosystem fund to 1.1 trillion won to support the scaling up and growth of enterprises. The current semiconductor ecosystem fund, which aims to raise 300 billion won by 2025, will begin making equity investments in materials, parts, equipment, and fabless companies starting in July this year.
The government will extend the applicable period for tax credits on national strategic technologies by three years and expand the scope of applicable items. It will consider adding advanced semiconductor materials, parts, and equipment technologies to the list of national strategic technologies and through the revision of the Enforcement Decree of the Act on Restriction on Special Cases Concerning Taxation, software rental and purchase costs, as well as rental and usage fees for research and testing facilities, will be included as eligible items. As for research personnel engaged in both national strategic technology and general R&D, the tax credit rate for national strategic technology R&D will be applied proportionally based on the actual research hours.
Furthermore, approximately 5 trillion won will be invested in R&D, commercialization, and workforce development from 2025 to 2027, aiming to enhance the overall competitiveness of the semiconductor ecosystem. This includes swiftly completing the preliminary feasibility study for large-scale R&D projects, such as the establishment of advanced semiconductor production-linked mini fabs, to secure technological competitiveness. The expansion of AI computing infrastructure will be pursued to strengthen the foundation for the demonstration and commercialization of advanced semiconductors, including AI semiconductors.
Finally, infrastructure for semiconductor clusters, such as roads, water, and power, will be promptly established with active cost-sharing by the public sector. In order to facilitate the relocation and expansion of National Route 45, which runs through the Yongin National Industrial Complex, the exemption from the preliminary feasibility study and national funding support will be pursued. The project to build an integrated dual pipeline to supply water to both the Yongin National and General Industrial Complexes will also seek exemption from the preliminary feasibility study, with the Korea Water Resources Corporation sharing part of the pipeline construction costs. Phased power supply will be implemented for the stable operation of the Yongin National Industrial Complex; in the first phase, an LNG power plant will be built in the industrial complex to supply 3GW of electricity; in the second phase, long-distance transmission lines will be constructed. Detailed plans for these transmission lines will be developed by the end of August, with construction costs shared between the public and private sectors.
Please refer to the attached files.
