[Exclusive] 1 Trillion Won Semiconductor Special Fund Created... 1%P Interest Rate Cut on Loans for Small and Medium Enterprises

President Moon to Announce 'K-Semiconductor Strategy' on the 13th
Special Fund for Semiconductor Facility Investment Established... "Effect of Securing Investment Funds and Easing Loan Interest"
Shortening of Approval Procedures for Power and Water Supply

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The government has decided to raise about 1 trillion won to support investments by mid-sized and small semiconductor companies. Procedures for permits related to power and water supply will also be significantly reduced. As the semiconductor hegemony competition between the U.S. and China intensifies, calls for the government's role have grown louder, and the government's semiconductor strategy is now taking its first shape.

According to the Ministry of Economy and Finance on the 10th, President Moon Jae-in will announce the "K-Semiconductor Belt Strategy" on the 13th, which includes raising special funds of more than 1 trillion won for semiconductor facility investment.

The core of this strategy is to strengthen the competitiveness of mid-sized and small semiconductor companies. Since considerable costs are inevitable for research and development (R&D), the plan primarily includes measures to ease financial burdens. A government official stated, "We will alleviate the loan interest burden for small and mid-sized companies."

The 1 trillion won will be supported by the Korea Development Bank's own resources and used to reduce interest rates by up to 1 percentage point from existing loan rates for companies. The purpose is to help secure investment funds and reduce interest burdens.

On the same day, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki held a green room meeting at the Government Seoul Office with Minister of Trade, Industry and Energy Moon Seung-wook and other related ministers to review key points of the K-semiconductor strategy. The attendees agreed to finalize and announce specific measures promptly, reflecting the discussion results.

Along with this, the government is considering establishing a separate tax credit track for the semiconductor sector to expand the credit rate and significantly reduce permit procedures related to power supply, water, and wastewater treatment. A senior government official said, "Stable operation and production of semiconductor factories require power and water supply," adding, "We plan to drastically reduce related procedures." Additionally, the annual quota for semiconductor-related academic departments, currently 1,856 students, will also be expanded.