Seoul – April 15, 2025:
South Korea on Tuesday announced a significant expansion of its support package for the country’s critical semiconductor industry, raising the total assistance to 33 trillion won ($23.25 billion) — a 25% increase from the 26 trillion won package unveiled last year.
The move is aimed at fortifying South Korea’s global competitiveness in semiconductors amid rising geopolitical uncertainty and intensifying competition from Chinese chipmakers, the government said in a joint statement issued by key ministries including trade and finance.
Of the new package, 20 trillion won will be allocated toward a financial assistance program for semiconductor firms, up from the previous 17 trillion won. The funds are intended to help chipmakers manage increasing operational costs, invest in R&D, and strengthen domestic production capabilities.
Finance Minister Choi Sang-mok emphasized the importance of the chips sector in a follow-up meeting, noting that the government would also engage actively with the United States regarding its ongoing Section 232 investigation into semiconductor and biopharma imports. The probe, which could result in tariffs or restrictions, poses a potential risk to South Korea’s export-driven economy.
South Korea is home to Samsung Electronics and SK Hynix, two of the world’s leading memory chip manufacturers. However, the country has trailed behind in areas like chip design and foundry (contract chip manufacturing), where companies like TSMC and Intel are stronger players.
In 2024, semiconductors made up 21% of South Korea’s total exports, valued at $141.9 billion. Of that, $46.6 billion went to China, and $10.7 billion to the United States, reflecting how critical both markets are to Korea’s chip sector.
The announcement comes as U.S. President Donald Trump hinted at imposing new tariffs on imported semiconductors, stating that flexibility would be considered for certain companies. This policy uncertainty has spurred several U.S. allies, including South Korea, to enhance domestic protections for key industries.
In addition to the chips sector, the South Korean government has recently introduced emergency support measures for the automotive industry, which also faces pressure from U.S. trade policy. These include financial aid, tax incentives, and subsidies aimed at stimulating local demand while negotiations with Washington continue.
Officials say the increased support reflects a broader economic strategy to insulate South Korea’s high-tech industries from external shocks and ensure long-term sustainability in a rapidly evolving global trade landscape.
