The package provides an increase of about a quarter to 33 trillion won ($23.25 billion) from the 26 trillion won support package unveiled last year, South Korea announced Tuesday.
The government claims it is reacting to calls to increase support and made the announcements in reaction to increased policy uncertainties under the current U.S. administration and from Chinese competitors.
The commerce ministry is among the ministries that released a joint statement announcing Seoul’s plan to increase a financial aid program for the semiconductors industry from 17 trillion won to 20 trillion won.
The action was taken in response to South Korea’s decision to boost support for its vital chips industry in order to assist businesses in bearing the increased expenses associated with competing on a worldwide scale, the statement stated.
The world’s top memory chip makers, Samsung Electronics and SK Hynix, are at home in Asia’s fourth biggest economy, but they have forsaken some rivals in areas of chip design and contract chip manufacturing.
Exports of semiconductors from South Korea accounted for $141.9 billion in 2024, or 21% of overall exports.
$10.7 billion and $46.6 billion worth of shipments were made to China and the US, respectively.
U.S. President Donald Trump stated on Sunday that he would decide on the final tax rate for imported chips within the next week, giving certain companies in the industry some leeway.
The government will aggressively consult with the U.S. to avoid any potential effects on domestic companies, Finance Minister Choi Sang Mok told reporters in a meeting following Tuesday’s statement.
As it attempts to absorb the effects of U.S. tariffs on a sector whose exports have skyrocketed in the U.S., South Korea announced emergency support measures this week for its car sector. On an annualized basis, the increases have averaged 14% over the country’s five-year history.
These include financial support for the auto industry, tax breaks, and subsidies to boost domestic demand, as well as initiatives to negotiate with the US and open up new markets.
