South Korea on Tuesday unveiled an expanded support package worth 33 trillion won (approximately $23.25 billion) for its critical semiconductor sector—an increase of around 25% from the 26 trillion won plan introduced last year.
The announcement comes amid increasing global competition, particularly from Chinese firms, and growing uncertainty surrounding trade policies under the current U.S. administration. According to a government statement, the enhanced measures aim to strengthen the industry’s resilience and maintain its global competitiveness.
As part of the expanded initiative, Seoul will raise the size of its financial assistance program for the semiconductor industry to 20 trillion won, up from the previously allocated 17 trillion won. The package is a joint effort by several ministries, including the Ministry of Trade, Industry and Energy.
Officials emphasized that the increased funding is intended to help domestic chipmakers manage rising operational costs as they compete in the global market.
South Korea, Asia’s fourth-largest economy, is home to leading memory chip manufacturers such as Samsung Electronics and SK Hynix. However, both firms face challenges in keeping pace with global competitors in areas like chip design and contract manufacturing.
In 2024, South Korea’s semiconductor exports totaled $141.9 billion, making up 21% of the country’s overall exports. Of this, shipments to China accounted for $46.6 billion, while the U.S. received $10.7 billion worth of chips.
Adding to the uncertainty, U.S. President Donald Trump announced on Sunday that new tariff rates on imported semiconductors would be revealed within the coming week. He also mentioned that certain companies might receive preferential treatment.
Following the announcement, South Korean Finance Minister Choi Sang-mok stated that the government would engage closely with the U.S. to mitigate any negative consequences arising from ongoing Section 232 investigations into semiconductor and biopharmaceutical imports.
Just last week, South Korea introduced emergency aid for its automotive sector to cushion the impact of impending U.S. tariffs. These measures include financial relief, tax incentives, and subsidies to stimulate domestic demand, alongside diplomatic efforts to negotiate favorable terms with Washington and explore new markets.
