In the second half of this year, new industrial policies will be implemented to support the semiconductor and artificial intelligence (AI) sectors, as well as regional strategic industries. The enforcement of the Special Law for Strengthening Semiconductor Industry Competitiveness will establish a foundation for cluster support and workforce development, while a significant policy shift will promote the integration of AI into manufacturing.
According to the Ministry of Economy and Finance's report published on June 30, titled 'Changes Starting in the Second Half of 2026,' the Ministry of Trade, Industry and Energy will reorganize its industrial policy support system focusing on semiconductors, AI, regional industries, and business restructuring.
In the fourth quarter, the government plans to select future strategic industry growth engines for five major regions. It aims to identify specialized industries in each region as growth engines to attract corporate investment.
Previously, support was primarily based on individual incentives such as technology development, industrial promotion, and subsidies. Moving forward, the approach will shift to customized package support tailored to corporate investment needs. This will integrate subsidies, technology development, workforce training, and infrastructure development to foster regional growth ecosystems.
Support for non-metropolitan areas will be enhanced. The government plans to move away from a uniform support model and provide preferential treatment for non-metropolitan regions to cultivate a super-regional industrial growth ecosystem.
The AI transformation in manufacturing (M.AX) will also be a key focus of industrial policy in the second half of the year. The government will expand support for integrating AI into manufacturing processes, enhancing production efficiency, quality control, energy efficiency, and logistics.
M.AX is a policy aimed at innovating productivity across the manufacturing sector. Faced with labor shortages, rising production costs, and global supply chain restructuring, the goal is to leverage AI to boost competitiveness on the ground.
In the semiconductor sector, the Special Law on Strengthening Semiconductor Industry Competitiveness and Support will take effect on August 11. This law includes provisions for designating and supporting semiconductor clusters, technology development, supply chain localization, workforce training, and establishing a special semiconductor account.
As a result, the legal basis for government support for the semiconductor industry will be significantly strengthened. Policies aimed at enhancing overall competitiveness in the industry, including the establishment of semiconductor production bases, core technology development, stabilization of the supply chain for materials, parts, and equipment, and workforce acquisition, will be pursued under this legal framework.
Regulations supporting the restructuring of traditional manufacturing will also be revised. Starting October 22, the support period for companies with approved business restructuring plans will be extended. The duration for restructuring plans in supply stabilization and industrial crisis regions will increase from the current three years to a maximum of five years.
The scope of support for business restructuring will also be expanded. Previously, companies in industrial crisis response regions were excluded from receiving support, but now these companies can receive financial assistance and tax incentives if their restructuring plans are approved. A new regulation will also exempt companies that support small and medium-sized partners during the restructuring process from unfair support practices under fair trade laws.
For petrochemical companies, if approved by the Minister of Trade, Industry and Energy, joint actions necessary for restructuring will be exceptionally permitted. This measure aims to facilitate the restructuring of the petrochemical industry, which is facing oversupply and declining profitability.
A regulatory framework will also be established for the low-carbon transition of the steel industry. The enforcement of the Special Law on Strengthening Steel Industry Competitiveness and Carbon Neutral Transition will create a comprehensive support system for research and development, verification of low-carbon steel technologies, standards and certification for low-carbon steel, and the establishment of low-carbon steel special zones.
* This article has been translated by AI.
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