South Korea has unveiled an expanded support package worth Won33trn ($23.25bn) to bolster its semiconductor industry, up from Won26trn previously announced.

The announcement comes amid trade policy tensions, with US President Donald Trump stating that the US would soon announce tariff rates on imported semiconductors. However, he noted some flexibility would be extended to certain companies.

Seoul also plans to allocate more than Won4trn in fiscal resources, which will be injected by 2026.

According to a joint statement from ministries including the Ministry of Trade, Industry and Energy, the package includes significant backing for infrastructure development, particularly in key semiconductor clusters in Yongin and Pyeongtaek.

The government plans to cover 70% of corporate expenses related to undergrounding transmission lines in these clusters.

National budget support for infrastructure in specialised strategic industry zones will rise to between 30% and 50%.

For large-scale clusters with investments exceeding Won100trn, the ceiling for national budget support will increase from Won50bn to Won100bn, the statement said.

In addition, the government will provide a new subsidy for small and medium-sized semiconductor enterprises producing advanced materials, components, and equipment.

More than Won3trn in low-interest loans will also be made available to firms within the sector.

The support package includes the development of mini-fabs — facilities that replicate large-scale production environments — to promote the K-semiconductor technology innovation platform, described as South Korea’s equivalent to Belgium-based research hub IMEC.

The government will also raise financial assistance to the industry through public financial institutions to Won20trn, up from the previous Won17trn, Reuters reported citing the government as saying.

In 2024, South Korea exported $141.9bn worth of semiconductors, accounting for 21% of its total exports.

Of this, $46.6bn went to China and $10.7bn to the US, the publication said citing government data.

Finance Minister Choi Sang-mok stated that the South Korean government would actively engage with the US over Section 232 investigations concerning semiconductor and biopharmaceutical imports, aiming to minimise any negative effects on South Korean firms.

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