Countering US trade tensions and Chinese competition to protect its tech edge and vital exports, South Korea boosts its chip sector support to $23.25 billion.
South Korea has expanded its support for the semiconductor sector, raising the aid package to 33 trillion won ($23.25 billion). This marks a significant increase from the 26 trillion won announced in 2023.
The decision follows growing uncertainty around US trade policies and mounting competition from Chinese chipmakers. According to a joint government statement cited by Reuters, the new measures aim to strengthen South Korea’s global competitiveness in chip production.
As part of the initiative, financial support for the semiconductor industry will rise to 20 trillion won, up from 17 trillion won. The plan involves multiple ministries, including the Ministry of Trade, Industry and Energy.
The move is intended to help local chipmakers manage soaring production costs and maintain a global edge. South Korea is a key player in memory chip manufacturing, with firms like Samsung Electronics and SK Hynix leading the sector. However, the country has lagged in chip design and foundry services.
Semiconductors remain vital to the national economy, making up 21 per cent of exports in 2024, valued at $141.9 billion. Exports to China reached $46.6 billion, while shipments to the US totalled $10.7 billion.
The announcement comes as former US President Donald Trump indicated impending tariff decisions on imported semiconductors, with some flexibility promised for select companies.
Finance Minister Choi Sang-mok stated that the government would engage with Washington on Section 232 investigations into chip and pharmaceutical imports to shield domestic industries from potential harm.
Last week, South Korea also revealed emergency support for the auto sector, affected by similar US trade threats. Measures include financial aid, tax incentives, efforts to boost local consumption, and ongoing negotiations with the US to secure broader market access.
