South Korea to boost support of semiconductor industry in the face of Trump's tariffs

SEOUL, South Korea (AP) — South Korea said Tuesday it will expand its financial support package for its crucial semiconductor industry to 33 trillion won (about $23 billion) in part of efforts to address uncertainties posed by the Trump administration’s tariff hikes.

The package represents roughly a 26% increase from the 26 trillion won (about $18 billion) announced last year. Officials are focusing on providing low-cost loans, subsidies, and other financial incentives to stimulate investment in the semiconductor sector. The government aims to facilitate the development of advanced chips by expanding financial assistance for research and development activities and high-tech manufacturing equipment

Officials also plan to boost spending on industrial infrastructure, including covering the larger part of the costs for building underground power transmission systems in semiconductor clusters in the cities of Yongin and Pyeongtaek, which have attracted investments from chip giants Samsung and SK Hynix.

The government said in a statement that the plans aim to address uncertainties stemming from U.S. trade policies and to maintain the competitiveness of South Korea’s chip industry. There are growing concerns that South Korean companies are falling behind rivals in Taiwan and other countries in producing high-tech chips for artificial intelligence and advanced applications, while Chinese competitors are rapidly closing the gap in memory chips.

“The U.S. government has postponed its plans for reciprocal tariffs for 90 days. There’s anticipation that product-specific tariffs will be announced for sectors such as semiconductors or pharmaceuticals,” South Korean Finance Minister Choi Sang-mok said in a policy meeting on Tuesday. “This is a valuable time to strengthen the competitiveness of our companies in the face of a global trade war.”

South Korea plans to dispatch a delegation to the United States soon to address recent tariff hikes and other trade concerns, part of Seoul’s ongoing efforts to shield the country’s export-driven economy from negative impacts.

The government also last week launched an emergency funding program worth 3 trillion won ($2 billion) to help its automobile industry cope with the impact of increased tariffs imposed by the United States. That package includes expanded low-cost financing from state-run lenders, as well as a new financing program backed by auto giants Hyundai and Kia, along with financial institutions, aimed at supporting struggling carmakers and auto parts manufacturers.