South Korea unveils $28.6b chip package
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The news: The South Korean government has unveiled a 26 trillion won ($28.6 billion) support package of incentives to bolster its chip manufacturing sector.
The numbers: The package will deliver at least 17 trillion won in low-cost loans, 1.1 trillion won for a chip ecosystem investment fund, over 2.5 trillion won of infrastructure construction, and more than 5 trillion won of grants for research.
The context: Announced by President Yoon Suk Yeol on Thursday, the package will focus on providing financial support through state-run Korea Development Bank for chip makers and suppliers to invest in semiconductor infrastructure in the country. The plan will also extend tax breaks which had been scheduled to expire at the end of 2024.
Two leading chipmakers, Samsung and SK Hynix, are likely to benefit strong from the support as they continue an uphill battle against stiff competition from the likes of Taiwan Semiconductor Manufacturing CO and Intel.
Reuters reports that Yoon said at a meeting with top government officials: "As we all know, semiconductors are a field where all-out national warfare is underway. Win or lose, that depends on who can make cutting-edge semiconductors first.”
The US has also rolled out sizeable grants to chipmakers in efforts to attract more manufacturing projects and steer companies away from China, with the Biden administration setting aside USD39 billion in tax benefits, loan guarantees and grants under the CHIPS Act.
The sources: Wall Street Journal, Bloomberg, Reuters
