Expecting Increased Momentum for Industrial Complex Development with Expanded Government Financial Support
"We Will Do Our Best to Provide Administrative Support for Smooth Project Implementation"
Lee Sang-il, mayor of Yongin City, Gyeonggi Province, requested that infrastructure expansion be expedited to ensure that the semiconductor production lines (fabs) of Samsung Electronics and SK Hynix operate without disruption.
On the 17th, Mayor Lee said, "We welcome the government's plan to strengthen financial investment in the semiconductor sector for the successful establishment of the 'Yongin Semiconductor Cluster General and National Industrial Complexes,'" adding, "Efforts must be accelerated to expand infrastructure such as power and water supply so that the semiconductor fabs under construction can operate as planned without missing the golden time."
A view of the 'Yongin Semiconductor Cluster General Industrial Complex' under development in Wonsam-myeon, Cheoin-gu, Yongin City. SK Hynix began construction of the semiconductor production line here in February. Provided by Yongin City
Earlier, on the 15th, the government decided at the 'Economic Ministers' Meeting and Industrial Competitiveness Enhancement Ministers' Meeting' chaired by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok to support four major initiatives to build a semiconductor innovation and growth ecosystem: ▲infrastructure construction ▲investment support for materials, parts, and equipment (MP&E) ▲next-generation semiconductor technology development ▲securing outstanding talent.
On the same day, the government announced that it would significantly increase the 26 trillion won scale of financial, fiscal, tax, and infrastructure support announced last year through the 'Comprehensive Semiconductor Ecosystem Support Plan' to 33 trillion won and invest more than 4 trillion won in fiscal funds by next year.
Specifically, the government will cover 70% of the national budget for the undergrounding costs of power transmission lines necessary for the creation of the Yongin-Pyeongtaek semiconductor cluster. The national budget support limit for infrastructure such as power and water supply for large-scale clusters with investments exceeding 100 trillion won will also be expanded from a maximum of 50 billion won to 100 billion won, and the national budget support ratio for infrastructure in advanced strategic industrial complexes such as the Yongin System Semiconductor Cluster will be raised from 15-30% to 30-50%.
The government also introduced investment subsidies for small and medium-sized enterprises (SMEs) producing MP&E, reflecting 70 billion won in this supplementary budget, and plans to increase the size of the Advanced Strategic Industry Fund for low-interest loans to semiconductor companies from 17 trillion won to 20 trillion won.
The government’s plan also includes ▲expansion of technology guarantees for semiconductor SMEs ▲raising the investment tax credit rate for national strategic technology investments.
Mayor Lee said, "With this government support, 150 billion won in national budget support will be provided for infrastructure expansion in the Wonsam Yongin Semiconductor Cluster General Industrial Complex and the Idong-Namsa Advanced System Semiconductor National Complex," adding, "This will also give momentum to the early establishment of semiconductor production lines."
Mayor Lee added, "Yongin City has also shortened the approval period for the advanced system semiconductor complex plan," and "We will continue to mobilize administrative power to the fullest to support smooth project implementation."
Meanwhile, in the case of the system semiconductor complex, following the approval and announcement of the complex plan in December last year, the Korea Land and Housing Corporation (LH) is conducting basic surveys for compensation. In the Yongin Semiconductor Cluster Complex, construction for the first fab began in February.
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