South Korea pledges $23B for chip industry as tariffs loom
What's the story
South Korea has announced a whopping 33 trillion won ($23.25 billion) support package for its semiconductor industry.
The move comes amid fears of upcoming US tariffs on semiconductors, which could negatively affect Korean companies such as Samsung and SK Hynix.
The announcement comes after US President Donald Trump said he would soon reveal the tariff rate on imported semiconductors, after previously excluding them from his steep "reciprocal" tariffs.
Investigation
US probes into semiconductor imports on national security grounds
Separately, President Trump has promised to look into the "whole electronics supply chain" for national security.
The US Department of Commerce has also launched an investigation into the effect of semiconductor imports, their manufacturing equipment, and related products on national security.
The scrutiny is focused on national security concerns related to semiconductor imports and their manufacturing equipment.
Increased support
South Korea's funding surpasses previous year's commitment
The latest funding from South Korea surpasses last year's 26 trillion won commitment by about a quarter.
The government also plans to subsidize the construction of underground power transmission lines to semiconductor clusters.
It will also raise the funding ratio for infrastructure in advanced industrial complexes from 30% to 50%.
These measures will strengthen the competitiveness and resilience of South Korea's semiconductor industry amid changing global trade dynamics.
Financial aid
Offering low-interest loans to semiconductor firms
The South Korean government plans to give 20 trillion won in low-interest loans to semiconductor companies between 2025 and 2027, up from the current 17 trillion won.
Other initiatives include training and research programs for domestic master's and doctoral students and global joint research programs for foreign talent.
These measures are aimed at supporting the growth and innovation in the country's semiconductor industry.
Industry significance
South Korea's semiconductor industry crucial for global market
Home to top chipmakers such as Samsung Electronics and SK Hynix, semiconductors are South Korea's biggest export.
In 2024, South Korea's semiconductor exports reached $141.9 billion, making up over 20% of the country's total exports of $683.6 billion.
The US is South Korea's second-largest export destination, with total exports increasing 10.5% year-on-year to $127.8 billion in 2024.