The government has decided to expand financial support such as tax deductions and long-term low-interest loans to support the semiconductor industry.
On May 6, the government held a "Big Three for Innovation Growth (BIG3) Promotion Meeting" presided over by Hong Nam-ki, acting Prime Minister and Deputy Prime Minister for Economic Affairs, at the Pangyo System Semiconductor Design Support Center in Seongnam, Gyeonggi Province, and discussed the plan.
Currently, R&D and investment tax credits applied to large companies are divided into two categories: general deduction and new growth source technology deduction.
The "general deduction" applies 0-2% to R&D investment and 1% to facility investment. The "New Growth Source Technology Deduction" will be applied to R&D and facility investment with a deduction rate of 20 to 30 percent and 3 percent, respectively, higher than general deductions.
The Ministry of Economy and Finance is considering establishing a separate item with a higher deduction rate than new growth source technology and applying it to semiconductor R&D and facility investment.
It seems to reflect the industry-wide sense of crisis that Korea may fall behind as competition has intensified among the U.S., Europe, China and Taiwan to foster its semiconductor industry and attract semiconductor factories from global companies.
"As competition for semiconductor hegemony is intensifying among the U.S. and other countries, we are actively considering easing finance, taxation, finance regulations. We will focus on discussing key tasks to foster innovative semiconductor industries in terms of human resources training" said acting Prime Minister Hong.
As a result, financial support for semiconductor industries is expected to increase. "We are planning to raise additional 280 billion won ($252 million) this year, including 100 billion won for semiconductor fund, 100 billion won for DNA+BIG3 fund and 50 billion won for system semiconductor win-win funds,” Hong said.
Regarding the creation of semiconductor clusters, he said, "We will review support measures for infrastructure such as electricity and water and actively support joint utilization facilities such as AI semiconductor design support center."
The government is also going to further expand size of training semiconductor workers. "The government is currently planning to train 17,000 people by 2030 regarding system semiconductor personnel. We are planning to expand the size of training by reflecting the demand for manpower in the semiconductor industry," said acting Prime Minister Hong.
He said that the semiconductor industry is demanding more than double the number of people who are trained, including the memory sector, and expansion of the number of semiconductor-related departments.
"In consideration of the growth of the semiconductor industry, we will raise our manpower training goals, especially under the current system by adjusting departments in universities, revising standards for increasing graduate school quota, and establishing joint departments," he added.
