'Export Strategy' Min-Dang-Jeong... "Semiconductor Packaging Preliminary Feasibility Study and 530 Billion KRW Policy Financing Support"

The government, the National Assembly, and private companies are joining forces to overcome South Korea's export crisis, which has recorded a trade deficit for 12 consecutive months. They plan to provide 530 billion won worth of policy financing to support semiconductors, a pillar of our exports, and to promptly push forward legislative amendments to increase tax credits for investments in national strategic technologies, which are currently stalled in the National Assembly.

On the 3rd, the Ministry of Trade, Industry and Energy announced that Minister Lee Chang-yang attended the 'Export Strategy Private-Party-Government Council' at the National Assembly to overcome the export crisis. The meeting was attended by Joo Ho-young, floor leader of the People Power Party, Sung Il-jong, chairman of the People Power Party Policy Committee, and about 10 private company representatives including Kim Dong-seop, President of SK Hynix.

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy is speaking at the Emergency Economic Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 3rd. Photo by Hyunmin Kim kimhyun81@

The council recognized the serious reality that exports have declined for five consecutive months and the resulting trade deficit has persisted for a year, agreeing that the government, National Assembly, and companies must unite their capabilities. According to the Ministry of Trade, Industry and Energy, last month, South Korea's exports were $50.1 billion, imports were $55.4 billion, resulting in a trade deficit of $5.3 billion. The cumulative trade deficit up to February this year reached $17.95 billion, accounting for 39% of last year's annual trade deficit of $42.7 billion.

The council focused on discussing countermeasures for the decline in semiconductor exports, which account for 20% of our exports. Minister Lee announced at the meeting that to strengthen competitiveness in the semiconductor back-end process sector, a preliminary feasibility study project for advanced packaging technology development will be promoted this year, along with providing 530 billion won in policy financing support.

Considering the worsening export conditions, he also requested prompt cooperation from the National Assembly to amend the Restriction of Special Taxation Act to increase tax credits for investments in national strategic technologies and to introduce temporary investment tax credits. Last month, the government requested the passage of the amendment to the Restriction of Special Taxation Act to the National Assembly, but the discussion was delayed and ultimately the bill was not passed.

Semiconductor exports decreased by 44.5% in January and 42.5% in February this year, becoming a major cause of the trade deficit. If the recovery of semiconductor exports is delayed this year, it is expected to inevitably hinder the government's export target of $685 billion. Minister Lee stated, "We will do our best to negotiate with U.S. authorities to ensure that our position is fully reflected regarding U.S. semiconductor industry investment support and semiconductor equipment export regulations."