Green Vehicles and Bio Industries Power New Sectors... February Export Rebound is 'Questionable'

Ministry of Industry Reports to Blue House on 17th... Theme: 'Innovative Growth'
Designation of Specialized SoBuJang Complex... Expansion of Eco-friendly Vehicle Distribution and Production
COVID-19 Hinders Exports... Additional Measures to be Announced After 20th

Sung Yun-mo, Minister of Trade, Industry and Energy

[Asia Economy Reporter Kim Bo-kyung] The government is aiming to achieve exports of 300,000 eco-friendly vehicles such as electric and hydrogen cars, and $10 billion in biohealth exports this year. It will invest a record budget of 1 trillion won over 10 years in next-generation semiconductor technology development. The strategy is to nurture core new industries and establish future growth engines following semiconductors.

On the 17th, the Ministry of Trade, Industry and Energy reported the 2020 work plan containing these details at the Blue House State Guest House, attended by President Moon Jae-in. The joint briefing with the Ministry of Economy and Finance, Ministry of SMEs and Startups, and Financial Services Commission was held under the theme of 'Innovative Growth.'

The Ministry announced plans focusing on four key themes: ▲achieving solid independence in materials, parts, and equipment (SoBuJang) ▲nurturing new industries as 'post-semiconductor' sectors ▲becoming the global No.1 hydrogen economy nation ▲turning exports into positive growth.

Accelerating 'SoBuJang Independence'... 2.1 trillion won Budget Invested

First, within this year, the government will completely resolve supply concerns regarding the three major export-restricted items from Japan and invest 2.1 trillion won in achieving independence for 100 key items.

In particular, technological independence will be achieved for nine materials and parts in fields such as semiconductors, displays, secondary batteries, and robotics. Following the recently passed 'SoBuJang Special Act,' efforts will be made to ensure supply stability.

To minimize supply disruptions related to COVID-19, mid- to long-term efforts will continue, including ▲activating domestic return of companies operating in China ▲diversifying supply chains ▲expanding global market share of domestic companies.

The semiconductor cluster under development in Yongin, Gyeonggi Province, will be designated as a 'SoBuJang Specialized Complex,' providing strong incentives for infrastructure construction, technology development, and commercialization to accommodate about 50 semiconductor-related companies.

Additionally, 57.3 billion won in R&D funding will be provided over five years to develop domestically produced CNC (Computer Numerical Control) devices, which currently have over 90% dependence on Japan, aiming for localization by 2024. By the first half of this year, '100 Global SoBuJang Master Companies' will be selected, and over 100 programs including R&D, manpower, funding, and investment will be supported jointly by related ministries.

Eco-friendly Vehicles, Biohealth, Next-generation Semiconductors... Nurturing Future Growth Engines in New Industries

As part of this year's new industry measures, the Ministry will accelerate the expansion of eco-friendly vehicle distribution and production. The goal is to lead the global eco-friendly vehicle market by producing 440,000 vehicles and exporting 300,000 units. By cumulative standards this year, plans include distributing 195 hydrogen buses, 1,478 electric buses, and 7,430 electric vehicle charging stations.

A record budget of 1 trillion won over 10 years will be invested in next-generation semiconductor technology development to induce large-scale investment and win-win cooperation. Efforts include establishing a win-win fab tailored to fabless (semiconductor design companies) demand and operating a 100 billion won scale win-win fund to create a growth foundation for fabless companies.

This year, semiconductor exports are targeted at $100 billion, and biohealth exports at $10 billion. Plans include starting operations of a cutting-edge fine process new line in Hwaseong, Gyeonggi Province this month and mass production of 5-nanometer processes in the first half of the year to achieve a 20% global foundry market share.

Korea holds the world's second-largest bio production capacity after the United States. In addition to existing bio production infrastructure, the government will begin designing a bio production workforce training center with an annual capacity of 600 people in the first half of this year and complete small and medium-sized enterprise vaccine contract manufacturing facilities in Andong and Hwasun in the second half, solidifying its status as a 'Global Bio Production Hub.'

Other initiatives include ▲localization of LNG gas turbines ▲pilot projects for electric vehicle battery leasing ▲distribution of manufacturing collaborative robots and service robots for care and logistics ▲enactment of the Industrial Intelligence Special Act to foster promising new industries.

"Hydrogen Economy, Leap to Global No.1 Nation"... COVID-19 Restricts Export Recovery

The slogan to become the 'Global No.1 Nation' in the hydrogen economy was also announced. The plan is to rapidly expand the hydrogen utilization base by distributing 10,000 hydrogen vehicles and installing 100 new hydrogen charging stations. By producing by-product hydrogen, wholesale hydrogen prices will be reduced by 25%, lowering charging station operating costs, while supporting the spread of privately operated hydrogen charging stations.

This year, the government aims to export 1,000 hydrogen vehicles, targeting global hydrogen vehicle sales No.1 for two consecutive years. Specific plans include ▲exporting 70 hydrogen trucks to Switzerland ▲exporting $3 million worth of hydrogen drones to the U.S. and China ▲signing new supply contracts for 10MW hydrogen fuel cells in China.

However, the impact of COVID-19 has acted as an unexpected variable for Korean exports, hindering early export recovery. The Ministry of Trade, Industry and Energy stated on February 13 during a pre-briefing for the work report that it is "difficult to make a premature judgment" on the possibility of exports turning positive in February. They added, "The export statistics expected around the 20th will determine the outcome." They also said, "We are making every effort to minimize COVID-19 damage and enable an early positive turnaround as soon as possible," and "additional export measures will be announced after the 20th."

The government plans to lead export recovery through the advancement of promising items such as eco-friendly vehicles, LNG carriers, and system semiconductors. It will also diversify export items by increasing the export share of new industry items like bio and secondary batteries from 9.2% last year to over 10% this year.

Through trade finance worth 257 trillion won, the government aims to achieve an export share of over 20% for small and medium-sized enterprises and utilize new free trade agreements (FTAs) such as RCEP as an opportunity to reach $200 billion in New Southern Market trade.

This content was produced with the assistance of AI translation services.