[2022 National Audit] Semiconductor Budget Needed Is 750 Billion Won... Government Budget Overlaps with 800 Billion Won

Assemblywoman Yang Hyang-ja Conducts Comprehensive Survey of 87 Semiconductor-Related Projects Across All Ministries

Yang Hyang-ja / Provided by Yang Hyang-ja's Office

[Asia Economy Reporter Kim Pyeonghwa] While the government’s semiconductor-related project budgets overlap by approximately 800 billion KRW, it has been revealed that the 750 billion KRW budget necessary for promoting strategies to achieve semiconductor superpower status was not reflected.

Yang Hyang-ja, an independent member of the National Assembly’s Industry, Trade, Energy, Small and Medium Enterprises Committee representing Gwangju Seo-gu, announced on the 4th that after conducting a full survey of semiconductor-related projects and required budgets by each government ministry, out of a total of 87 projects, budgets for 25 projects amounting to about 795.9 billion KRW were overlapping. She also pointed out that an additional budget of approximately 757 billion KRW is needed for 26 projects.

Earlier, at the People Power Party’s semiconductor-related party-government consultation meeting held in August, Yang requested Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy to report on overlapping semiconductor projects between ministries and improvement measures. However, due to the absence of a semiconductor control tower, inter-ministerial consultations did not take place, prompting Yang to conduct a full survey targeting all ministries herself.

As a result, ▲semiconductor technology development (a total of 14 projects, 476.8 billion KRW) ▲human resource training (a total of 7 projects, 180 billion KRW) ▲infrastructure advancement and corporate support (4 projects, 138.9 billion KRW) were found to be overlapping.

A representative case of overlapping budgets is the Multi-Project Wafer (MPW) support project, where budgets from the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups overlap. Since 2020, the Ministry of Trade, Industry and Energy has been supporting fabless (semiconductor design) companies’ MPW projects by covering about 70% of the average cost of MPW prototype production. All 65 companies receiving support from the Ministry of Trade, Industry and Energy are small and medium enterprises. However, the Ministry of SMEs and Startups is also running a similar project, providing 100 million KRW per company to 5 companies for MPW production costs.

Budgets for establishing advanced industry education centers are also duplicated. The Ministry of Trade, Industry and Energy, Ministry of Education, and Ministry of Employment and Labor are jointly conducting a project to establish advanced industry education centers with a total budget of 152.3 billion KRW, targeting prospective job seekers (vocational high school students, university students, unemployed) and current workers (new employees, those wishing to change jobs, teachers). Since the cost of equipment installation for process practice in advanced industries such as semiconductors is astronomical, there are concerns that because each ministry is sporadically establishing advanced industry education centers, it is difficult to install proper practical equipment due to budget constraints.

Meanwhile, it has been revealed that the Ministry of Trade, Industry and Energy has not even properly secured the budget for implementing the “Semiconductor Superpower Achievement Strategy” jointly announced by government ministries. The 388.4 billion KRW cost for essential infrastructure such as power and water supply for semiconductor industrial complexes, which is the first measure of the Semiconductor Superpower Achievement Strategy and a key national agenda of the Yoon Seok-yeol administration, was completely excluded from next year’s budget. The 1.2 billion KRW budget for building semiconductor academy training centers and design practice rooms, which aims to train more than 3,600 practical personnel over five years, was also not included. Budgets for semiconductor workforce status monitoring and professional personnel database construction (1 billion KRW) and the new establishment cost of the ‘AI Semiconductor Innovation Design Center’ to support fabless companies (2 billion KRW) were all omitted.

Yang said, “Due to the absence of an advanced industry control tower, siloed operations between ministries have led to a proliferation of similar projects by each ministry, while the necessary support is not being provided, which is a frustrating situation.” She emphasized, “To win the future advanced technology global competition, it is essential to establish and implement a comprehensive industrial, technological, and scientific policy with a long-term perspective through an advanced industry control tower.” Previously, in November 2020, Yang had introduced a bill to amend the Government Organization Act to establish an advanced industry control tower as the lead sponsor.