The South Korean government is set to eliminate regulations in advanced industries, including semiconductors, secondary batteries, and biotechnology, to support corporate investment. This initiative aims to address business challenges and accelerate the implementation of three major mega-projects. The government anticipates that support for the Yongin semiconductor cluster will generate an investment effect of approximately 4.2 trillion won.
On August 13, Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol chaired a meeting of the Emergency Economic Headquarters and the Economic Relations Ministers' meeting, where the 'Field-Centered Corporate Investment and Innovation Support Plan (Phase 1)' was announced. This plan identifies actionable tasks based on suggestions from businesses, local governments, and industry associations.
To begin with, the government will ease industry restrictions to allow battery recycling companies to establish themselves in the Gumi and Pohang national industrial complexes. Currently, while battery manufacturing is permitted, the recycling of key minerals from waste batteries is classified under waste management, making it difficult for these companies to set up operations. The government plans to include the manufacturing of intermediate and final materials from recycled lithium, nickel, cobalt, manganese, and graphite as eligible for establishment, supporting around 100 billion won in new investments from 2026 to 2027.
A Ministry of Economy and Finance official stated, "As South Korea begins to see a significant number of waste batteries from electric vehicles, and since lithium, nickel, and cobalt are not mined domestically, there is a need to develop businesses that recycle these key minerals. This will help establish a value chain and resource circulation ecosystem that encompasses how we extract and utilize minerals before battery manufacturing."
In the semiconductor sector, the government will address building permit issues arising from factory expansions in the Yongin semiconductor cluster. Under current regulations, any demand for expansion requires changes to existing building permits. Companies have expressed concerns that repeated permit modifications during the expansion process could halt ongoing construction.
The government plans to amend building laws to allow new permits for expansion projects in industrial complexes of a certain size, separate from existing building permits. This change is expected to facilitate the early implementation of approximately 25 trillion won in existing investments.
Additionally, tax incentives will be established to support the demonstration of semiconductor materials, components, and equipment. The government intends to introduce a tax exemption for property received by non-profit organizations operating test beds for semiconductor-related companies. The investment scale for related demonstration projects is estimated at around 800 billion won, with specific tax relief amounts to be determined at the time of the actual donation.
In the Ochang Science Industrial Complex, the government will change the land use of green spaces owned by Cheongju City to support the expansion of bio-manufacturing facilities, facilitating an investment of about 530 billion won. In the Iksan National Food Cluster, the government will expand the beverage manufacturing site, which has a low occupancy rate, to include food and beverage manufacturing, promoting an investment of approximately 350 billion won.
Regulations in advanced industries and robotics will also be revised. The government will clarify safety standards to allow collaborative robots to operate in the same space as humans, with detailed guidelines expected to be established in the first half of next year. Current industrial safety regulations generally require fixed robots to be enclosed by barriers at least 1.8 meters high.
A Labor Ministry official noted, "There have been ambiguities in the field, and international standards have changed. We aim to clarify these issues and reflect the updated standards in detailed guidelines to reduce on-site inconveniences."
For six advanced strategic industries, including semiconductors, secondary batteries, displays, biotechnology, robotics, and defense, the government will introduce fire safety performance-based design using computer simulations. The inspection period for city gas completion at semiconductor factories will be reduced from seven days to three, and some inspection items will be exempted.
The government will also ease regulations on industrial complex occupancy. The limit for designating restricted industry zones, where all industries can be allowed, will be expanded from 30% to 50% of industrial land, and the requirement for landowner consent for designating special industry zones will be lowered from two-thirds to a simple majority.
Through these measures, the government expects an investment effect of about 4.2 trillion won. However, it is important to note that this includes both new investments and the early implementation of existing investments. Following this first phase of measures, the government plans to identify additional field suggestions and develop a second investment plan focused on ultra-innovative economic leading projects and green industries in the third quarter.
* This article has been translated by AI.
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