Expanded Economic Ministers' Meeting Hosted by President Moon
Ministry of Industry Announces 'Key Strategic Industries Review and Support Plan for Advancement' Including Measures to Support Core Industries
[Sejong=Asia Economy Reporter Kwon Haeyoung] The government will roll out support measures for our key industries such as batteries and automobiles within the first half of the year, starting with semiconductors next month. As the semiconductor hegemony competition between the U.S. and China intensifies, awareness of the crisis facing our key industries has increased, prompting President Moon Jae-in to personally pledge support to strengthen industrial competitiveness.
On the 15th, the Ministry of Trade, Industry and Energy reported the "Major Strategic Industries Inspection and Leap Support Plan," which includes these details, at an expanded economic ministers' meeting chaired by President Moon. The meeting was attended by ministers from major economic departments and representatives from strategic industries such as semiconductors, automobiles, shipbuilding, and shipping.
After gathering industry opinions and consulting related ministries, the Ministry plans to announce the "K-Semiconductor Belt Strategy" next month, followed by the "Battery Industry Development Strategy" and the "Parts Industry Future Vehicle Transition Measures" within the first half of the year. By the end of the year, a "Transportation Sector Future Vehicle Transition Strategy" will also be released.
An official from the Ministry said, "Semiconductors, batteries, automobiles, and shipbuilding are the four major items where technological competition is most intense worldwide," adding, "We are creating support measures for key industries to conduct pre-inspections and take proactive responses when our industry's competitiveness is high."
The first government support measure is likely to be the semiconductor strategy announced next month. The government is pushing for the enactment of the "Semiconductor Special Act" and plans to nurture 4,800 semiconductor specialists over two years. To this end, it will expand master's and doctoral level experts, semiconductor contract departments, and specialized majors, and prepare measures to protect core personnel. Regulations such as the Chemical Substances Registration and Evaluation Act (Chemicals Evaluation Act) and the Chemical Substances Control Act will also be eased. Tax support will be expanded in response to industry demands. The semiconductor industry has requested the government to increase the tax credit for facility investment from the current 3-6% for large companies to 50%. They also proposed expanding the R&D tax credit. This is because the U.S. provides a 40% tax credit for semiconductor facility investments, and China offers up to 10 years of income tax exemption for companies with 28nm or below technology and business periods over 15 years, providing full-scale support.
An official from the Ministry said, "In a situation where countries are expanding support to reorganize supply chains led by their own countries, the government also wants to accommodate industry demands such as tax credits for facility investments as much as possible," adding, "However, since this is a matter to be discussed with related ministries such as the Ministry of Economy and Finance, it is still too early to mention specific figures. The Ministry of Economy and Finance also agrees on the necessity of expanding tax benefits."
Support measures for the battery industry will also be announced within the first half of the year. Conditions have also been set following the recent resolution of the battery dispute between LG Energy Solution and SK Chemicals. The battery industry development strategy is expected to include support for securing technology such as next-generation secondary battery development, training of battery design specialists and prevention of core personnel outflow, and plans to foster growth and expand the ecosystem of small and medium-sized enterprises in the battery sector through the establishment of a specialized fund.
Additionally, through the parts industry future vehicle transition measures, dedicated R&D for parts companies, the creation of a business restructuring support fund, and customized re-education plans for employees of parts companies will be prepared.
Furthermore, as our companies lead the high value-added and eco-friendly ship sectors in shipbuilding, the government is considering extending the deadline for special industrial crisis response areas such as Gunsan, Changwon, and Geoje, and plans to introduce future preparation measures including eco-friendly ship technology and digitalization of shipbuilding processes.
An official from the Ministry said, "We will continue to communicate with the industry, including the matters proposed today," and added, "We will spare no policy support so that our companies can compete confidently in the rapidly changing global competitive environment."
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