The government is set to establish a 'special fund for semiconductors' to enhance financial support for the semiconductor industry. As Samsung Electronics and SK Hynix pursue large-scale domestic investments, the government plans to focus its financial resources on building essential infrastructure, such as power and water supply, to support private investments.
According to government and industry sources on the 25th, the ruling party and the government have agreed to create a special fund for the semiconductor industry in the 2027 budget proposal. Unlike the general budget, which is broadly used for national financial needs, this fund will be managed separately to ensure stable investment in related projects. This initiative is backed by the Semiconductor Special Act, which took effect on August 11.
The government is expected to concentrate its financial support on infrastructure development, particularly in power and water supply, which companies often find burdensome during production facility investments. Plans are underway for the government to invest in Korea Electric Power Corporation and Korea Water Resources Corporation to secure these resources. Support is also anticipated to expand across the entire ecosystem, including advanced semiconductor research and development (R&D) and talent cultivation.
Government support is expected to drive the large-scale domestic investments being pursued by Samsung Electronics and SK Hynix. Both companies have announced medium- to long-term investment plans centered on advanced AI semiconductor production facilities and R&D infrastructure, leveraging the government's 'three mega projects.' As part of this, Samsung plans to begin expansion work at its semiconductor plant in Asan, South Chungcheong Province, a month earlier than originally scheduled next month. The government aims to maximize investment effectiveness by having the private sector handle production facility investments while supporting large-scale infrastructure development with public funds.
Communication between the government and the semiconductor industry is also strengthening. President Yoon Suk Yeol recently held a private dinner meeting with SK Group Chairman Chey Tae-won on August 20 and is reportedly coordinating a meeting with Samsung Electronics Chairman Lee Jae-yong. Key discussion topics include domestic investment plans in core industries like semiconductors and issues related to power and water supply, as well as regulatory and permitting challenges during the implementation of the three mega projects.
Industry insiders are noting that the establishment of the special fund for semiconductors will create a long-term financial support system. Building a semiconductor plant requires substantial time and investment, and delays in securing power and water can disrupt companies' investment schedules. Moreover, as global investments in AI infrastructure expand, the advanced memory market, including high-bandwidth memory (HBM), is rapidly growing, making the speed of investment increasingly critical. China is quickly advancing its memory technology, while the U.S. and Japan are competing to attract domestic semiconductor production facilities through subsidies and tax incentives.
An industry official stated, "If the government secures stable funding through the special fund and links it with private investments from Samsung Electronics and SK Hynix, it will accelerate the expansion of domestic semiconductor production infrastructure. The specific scale of the special fund, the target beneficiaries, and the actual financial resources allocated for infrastructure development will determine the success of the 'K-Semiconductor Mega Project.'"
* This article has been translated by AI.
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