south korea doubles down on chips amid tariff worries
Seoul, Tuesday, 15 April 2025.
south korea is boosting its investment in semiconductors. a $23.25 billion package aims to fortify its chip industry. this move comes as the u.s. considers tariffs on semiconductor imports. donald trump plans to investigate the electronics supply chain. the funding is a quarter more than last year’s commitment. the package includes subsidies for power infrastructure and low-interest loans. training programs and global research initiatives are also planned. south korea, home to samsung and sk hynix, seeks to maintain its dominance in the face of global competition and u.s. policy shifts.
market response and kospi
Following the announcement, the South Korean Kospi saw a positive reaction, rising 0.68% [1]. Specifically, shares of Samsung increased by 1.07%, while SK Hynix experienced a gain of 0.17% [1]. This immediate market response suggests investor confidence in the government’s commitment to bolstering the semiconductor industry and mitigating potential risks associated with u.s. tariff policies [1].
details of the support package
The support package includes several key provisions aimed at strengthening the semiconductor ecosystem [1]. The government plans to subsidize the construction of underground power transmission lines for semiconductor clusters [1]. The funding ratio for infrastructure in advanced industrial complexes will increase from 30% to 50% [1]. Low-interest loans totaling 20 trillion won will be available to semiconductor companies between 2025 and 2027, an increase from the current 17 trillion won [1]. These measures are designed to reduce costs and improve infrastructure for chipmakers.
talent development and r&d
Recognizing the importance of human capital, the support package also emphasizes talent development [1]. Training and research programs will be introduced for domestic master’s and doctoral students [1]. Global joint research programs will facilitate collaboration with foreign talent [1]. These initiatives aim to enhance the skills and expertise of the workforce in the semiconductor industry, fostering innovation and long-term competitiveness [1].
u.s. tariff concerns and negotiations
The increased support for the semiconductor industry is partly a response to potential u.s. tariffs on imported semiconductors [1]. President Trump has indicated plans to announce tariff rates soon and investigate the electronics supply chain [1]. Acting South Korean president Han Duck-soo stated that Trump instructed his administration to begin tariff negotiations with South Korea [1]. South Korea’s finance minister Choi Sang-mok plans to actively consult with the u.s. to minimize any adverse effects on domestic companies [7].
south korea’s semiconductor exports
Semiconductors constitute a significant portion of South Korea’s exports. In 2024, semiconductor exports reached $141.9 billion, accounting for just over 20% of the country’s total exports of $683.6 billion [1]. The u.s. is South Korea’s second-largest export destination, with exports increasing 10.5% year-on-year to $127.8 billion in 2024 [1]. These figures highlight the importance of the semiconductor industry to South Korea’s economy and its trade relationship with the u.s.
investment subsidies for smes
The South Korean government is also introducing investment subsidies for small and medium-sized enterprises (smes) in the semiconductor sector [2]. Smes investing outside the capital region will receive subsidies equivalent to 50% of their investment, while those investing in the capital region will receive 40% [2]. Medium-sized enterprises will receive 40% for investments outside the capital region and 30% within [2]. The government aims to support high-tech materials, components, and equipment through these subsidies [2].