Mid-sized Companies Sector: "Strengthening Semiconductor Tax Support is the Starting Point for Enhancing Global Competitiveness"

"Agreement on Government Recognition of the Importance of National Strategic Technology in the Context of Economic Security"

[Asia Economy Reporter Kim Cheol-hyun] The mid-sized enterprise sector has expressed a welcoming stance toward the government's plan to strengthen tax support measures for semiconductors and other industries. The Korea Federation of Mid-sized Enterprises (KFME) issued a statement on the 3rd, saying, "The plan to enhance tax support for semiconductors and related sectors is a highly desirable measure aimed at mitigating the sharp decline in the semiconductor sector, a key export item, and creating an opportunity to strengthen the global competitiveness of related industries."

The KFME evaluated, "Raising the tax credit rate for semiconductor investments by mid-sized enterprises from 8% to 15% will serve as a lifeline for the semiconductor industry, which is facing the worst conditions due to the global economic downturn causing a sharp drop in semiconductor demand, reduced exports to China, and intensified competition with Taiwan's TSMC and Japan's Rapidus Semiconductor Alliance."

According to the KFME, the total sales of mid-sized enterprises in the semiconductor sector amounted to approximately 33.5 trillion KRW in 2021, accounting for 22% of the total semiconductor sector sales of about 148 trillion KRW. The KFME stated, "We hope that further increases in the tax credit rate will be actively considered to boost investment vitality among mid-sized enterprises, which may have relatively limited investment capacity compared to large corporations," and added, "We deeply agree with the government's recognition of the importance of national strategic technology sectors from the perspective of economic security to prepare for the global economic downturn and establish a stable growth foundation, and we look forward to swift discussions and progressive decisions in the National Assembly through open communication between ruling and opposition parties."