The government is set to provide substantial financial support to bolster private sector investments in semiconductors. Additionally, it plans to enact the mega special zone law within the year, granting companies the highest level of regulatory exemptions.
Kim Jung-kwan, Minister of Trade, Industry and Energy, made these announcements during a national fiscal strategy meeting held at the Blue House on July 13.
Minister Kim stated, "Countries like China, Japan, and the United States are pouring astronomical amounts of money into semiconductor competition, viewing it as a war for national survival. We will boldly mobilize all means, including budgets, funds, and policy finance, to ensure our companies succeed."
To facilitate swift implementation of large-scale private investments, the government will provide comprehensive support for infrastructure, including land, water, and power. This initiative aims to accelerate the completion of the Yongin semiconductor cluster by 12 years, with the goal of operationalizing the Honam semiconductor cluster by 2030-2031.
The government will also focus on nurturing the relatively weak materials, parts, and equipment (known as SoBaJang), as well as the packaging and foundry industries. Minister Kim emphasized, "To prevent overseas SoBaJang companies from reaping the benefits of our semiconductor firms' large-scale investments, the government will closely support the establishment of domestic production bases for SoBaJang R&D and ensure rapid development of next-generation packaging technologies and validation bases."
Furthermore, the government will pursue the acquisition of next-generation technologies, including AI semiconductors, power semiconductors, and defense semiconductors. He noted, "We will concentrate support on large-scale R&D to quickly secure on-device AI chips and foster next-generation cargo and power semiconductors."
Institutional support will also be implemented. The mega special zone law will be enacted within the year to provide the highest level of regulatory exemptions for semiconductor investment companies. A comprehensive support package will be prepared, including tax incentives, investment promotion, and infrastructure. The existing special semiconductor law will also be transitioned into an 'execution-type special law' responsible for implementing large-scale national projects like mega projects.
Plans to foster AI robots were also unveiled. The government will establish industry-specific data factories nationwide to develop a Korean-style robot foundation model, and will support the localization of key components with low domestic production rates, such as actuators and robotic hands, through dedicated R&D. Additionally, specialized humanoids will be developed for ten major industries to be deployed in industrial settings.
To stimulate initial demand, the government will take proactive purchasing measures. Minister Kim explained, "In China, the government purchases 45% of the humanoids produced by companies, encouraging their mass production investments. We will expand the budget for validation and purchasing to promote private demand and actively purchase AI robots for research purposes."
Minister Kim concluded, "Our companies are investing in the future with the fate of their industries and businesses at stake. It is now the government's and the National Assembly's turn to provide support. We will ensure that bold and comprehensive financial and institutional support is swiftly implemented so that we do not fall behind competing nations as the private sector takes the lead in achieving a great leap forward for South Korea."
* This article has been translated by AI.
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