Addressing competition from China and uncertainties over US policies under President-elect Trump, South Korea plans $10 billion in loans to support its semiconductor industry.
South Korea plans to provide 14 trillion won ($10 billion) in low-interest loans next year to support its semiconductor industry. According to its finance ministry, the country is facing growing competition from China and uncertainties surrounding the new US administration.
The loans will be distributed through state-owned banks, including 1.8 trillion won for funding power transmission lines to support a new chip manufacturing complex.
South Korea, home to major memory chipmakers Samsung Electronics and SK Hynix, is constructing a massive high-tech chip cluster in Yongin and Pyeongtaek, south of Seoul. This complex is expected to become one of the world’s largest chipmaking hubs, aimed at attracting chip equipment manufacturers and fabless companies.
The ministry highlighted the rapid advancements in China’s semiconductor sector and the uncertainty regarding U.S. policy under President-elect Donald Trump’s second term. In response, the South Korean government plans to deploy all available resources to support domestic companies in overcoming challenges and achieving growth.
The ministry also noted that global trade and industrial dynamics could shift significantly following Trump’s inauguration. Concerns include potential reductions in U.S. investment incentives due to possible changes to the Inflation Reduction Act and the Chips and Science Act and the imposition of wider tariffs.
Trump recently announced plans to implement a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on Chinese goods, citing concerns over illegal immigration and the trade of illicit drugs.
South Korea faces increasing competition in chip design and contract manufacturing, particularly from China. Last month, Samsung Electronics reported that rising supplies of traditional chips from Chinese competitors had negatively impacted its third-quarter earnings.
