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Sung Yun-mo, Minister of Trade, Industry and Energy, is speaking about semiconductor support measures at the Semiconductor Industry Association Chairpersons' Meeting held on the 9th at the Westin Chosun Hotel in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

[Sejong=Asia Economy Reporters Haeyoung Kwon and Hyunjin Jung] Sung Yun-mo, Minister of Trade, Industry and Energy, held a meeting with the semiconductor industry for the first time this year and announced plans to prepare various support measures, including tax credits. This comes four months after the semiconductor supply crisis, which began with automotive parts at the end of last year. However, compared to the United States and China, where even the top leaders are involved in the semiconductor industry leadership, there are criticisms that our government's response has been rather slow.

On the 9th, Minister Sung attended a meeting at the Westin Chosun Hotel in Seoul with the Semiconductor Association chairpersons, including Lee Jung-bae, President of Samsung Electronics, and Lee Seok-hee, President of SK Hynix. Both sides discussed countermeasures in response to the recent semiconductor supply shortage and the U.S.-led global supply chain restructuring that has begun in earnest.

The Ministry of Trade, Industry and Energy had discussions last month and earlier this month, led by Kang Kyung-sung, Director of Industrial Policy, with Samsung Electronics, DB HiTek, and others regarding the semiconductor supply shortage. However, this was the first time Minister Sung personally intervened since the semiconductor supply crisis began at the end of last year. Even then, it was largely a 'courtesy meeting' following Lee Jung-bae’s inauguration as Semiconductor Association chairman last month. It is reported that the meeting shifted to a more substantive discussion on semiconductor supply chain restructuring as the industry delivered a 'petition to the government' requesting active government support.

The United States, which is putting its life on securing semiconductor supply chains, has swiftly expanded investment tax credits up to 40% and is preparing related legislation. An emergency semiconductor meeting at the White House is scheduled for the 12th. This is why there are criticisms that our government's awareness of the semiconductor supply chain issue is complacent.

Since the meeting between the government and the industry was held publicly, there is a high possibility that the government will accept the industry's demands. The industry requested the government to expand the facility investment tax credit from the current maximum of 6% for large corporations to 50%, and to enact a 'Special Act for Semiconductor Industry Promotion.' Minister Sung responded by saying he would present the 'K-Semiconductor Belt Strategy,' which includes plans to foster the domestic semiconductor industry.

Minister Sung said, "At the government level, we are preparing a strategy to establish South Korea as the world's leading advanced semiconductor manufacturing global factory and to leap forward as a comprehensive semiconductor powerhouse," adding, "We will establish and soon announce a comprehensive policy that reflects industry requests and can provide practical help to strengthen the domestic semiconductor industry ecosystem."

The government's comprehensive semiconductor measures, to be announced next month, are expected to include expanded tax credits for facility investments, support for infrastructure development such as power and water supply, research and development (R&D) investment, and workforce training, among various support measures.

The meeting between the government and the semiconductor industry lasted about 1 hour and 15 minutes. The discussions focused on major countries' semiconductor industry promotion policies following the semiconductor crisis, domestic investment expansion and government support measures, and semiconductor workforce development.