Government Strengthens Investment in Semiconductors and Future Cars... "Support Starting This Year"
Up to 40% Tax Credit Applied to R&D Investment
President Moon Jae-in is greeting Choi Woong-seon, CEO of Infac, during a preliminary talk at the expanded economic ministers' meeting held at the Blue House on the afternoon of the 15th. [Image source=Yonhap News]
[Asia Economy Reporter Jang Sehee] The Ministry of Economy and Finance will significantly increase tax support and budget investment in the semiconductor sector to respond to global hegemony competition.
According to the government on the 17th, the Ministry of Economy and Finance will strengthen investments in semiconductors and future cars. A government official stated, "We regard the semiconductor and future car sectors as our country's future strategic industries," adding, "Starting this year, we plan to provide full support through budgets and tax measures."
Recently, competition to secure dominance in the semiconductor market has intensified worldwide, including in the United States.
On the 12th (local time), President Biden presided over a 'Semiconductor Video Conference' attended by Samsung Electronics, holding up a semiconductor wafer and stating, "The chip I have here, this wafer, batteries, broadband?these are all infrastructure," expressing his intention to aggressively invest in the semiconductor industry.
The government plans to first apply a tax credit rate of up to 40% for research and development investments by memory semiconductor design and manufacturing companies.
In particular, it will consider including memory semiconductor design and manufacturing technologies in the new growth and core technology investment targets, offering up to a 40% reduction in income tax and corporate tax.
To respond to the increased power consumption of future cars, new research and development (R&D) budgets will also be supported for power semiconductors based on silicon carbide (SiC) and gallium nitride (GaN).
The government will significantly increase R&D investments to enhance the competitiveness of future cars. With the expanded investment amount, it will develop technologies for batteries, hydrogen fuel cells, autonomous vehicle communication, automotive semiconductors, vehicle sensors, and autonomous driving software. Through this, commercial autonomous driving services will be provided on nationwide highways and major local government hubs by 2025.
Legislation to implement corporate venture capital and introduce multiple voting rights will also be accelerated. Additionally, the government is reviewing the extension of special industrial crisis area designations for Ulsan Dong-gu, Geoje, and other regions.
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