South Korea boosts chip sector with $36 billion support package
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The news: South Korea has unveiled an increased support package to bolster its semiconductor industry in response to growing uncertainty on US tariff policy and intensified Chinese competition.
The numbers: Seoul will inject 33 trillion ($36 billion) won into the chip sector, an increase on the 26 trillion won package announced last year. The government said over 4 trillion won in fiscal resources is also planned to be injected by 2026.
The context: A statement released by the Ministry of Economy and Finance on Tuesday says that the semiconductor industry is expected to be targeted by item-specific tariffs from the US government, which launched probes into the semiconductor industry earlier this week.
Over the weekend, US President Trump said that he will soon be announcing a tariff on semiconductors imported to the US from abroad.
Seoul has also said it will provide support for infrastructure development, including power and water supply, to help key chip makers cope with heavier costs. Samsung and SK Hynix are two of the country’s biggest chipmakers, but have struggled to keep pace with rivals.
South Korea's semiconductor exports reached USD141.9 billion in 2024, with shipments to China and the US at USD46.6 billion and USD10.7 billion, respectively.
Also on Tuesday, South Korea’s Finance Minister Choi Sang-mok said that the country will endeavour to delay reciprocal tariffs as much as possible as it negotiates with US representatives. "From our national interest perspective, the idea is to negotiate as much as possible and wrap it up under the new government," the Minister said in answer to a lawmaker's question about the direction of Seoul's response.
The sources: Reuters, South Korea Ministry of Economy and Finance
