[Column] Companies Remain Reserved on Semiconductor Support Measures Announcement

26 trillion won. This is the amount the government announced on the 23rd that it will invest to strengthen South Korea's semiconductor competitiveness. It is more than half of this year's Seoul city budget, which amounts to about 46 trillion won. Earlier this month, the government had announced plans to invest around 10 trillion won in semiconductor support, but when the details were revealed, the amount more than doubled. Samsung Electronics and SK Hynix officially welcomed the announcement.

However, the more one listens to insiders in the industry, the more it becomes clear that there are reservations different from the official stance. There were voices expressing regret that, unlike the US and Japan, there is no direct subsidy support. One official explained, "The government made a strong announcement, but from the industry's perspective, it would be difficult to openly express disappointment," adding, "For now, the significance lies in the fact that support measures have been introduced."

Examining the government's 'Comprehensive Support Plan for the Semiconductor Ecosystem,' there are flaws hidden behind the huge numbers. The government announced that through the Korea Development Bank, semiconductor facility investment companies will be able to borrow 17 trillion won at low interest rates. While this is a way to increase investment liquidity for companies, it can be interpreted as relying on companies for investments of that scale while only partially reducing interest rates. In a situation where major countries are competing fiercely for semiconductor dominance using large-scale subsidies, this support remains passive.

The government's announcement to extend the scope and period of the semiconductor investment tax credit, which was set to expire this year, and to focus on infrastructure support for building the Yongin semiconductor cluster is also half-hearted at this point. Cooperation from the National Assembly to process related bills is essential, but as the current National Assembly is again divided with a ruling minority and opposition majority, it is more likely that the support measures will face various difficulties rather than being smoothly prepared. This is why there are concerns that while the current support may provide short-term relief, it may be separate from establishing mid- to long-term growth engines.

Above all, even the response from smaller companies, such as fabless (semiconductor design) and semiconductor materials, parts, and equipment (SoBuJang) companies, which the government identified as the main support targets, has been lukewarm. The government plans to create a fund worth 1.1 trillion won to invest in these companies. However, the industry has evaluated that "there is nothing tangible" due to the lack of specifics. It is time for the government to present more effective support and bold nurturing policies.