2021 Investment of 2.5 Trillion KRW in Semiconductors, Displays, and Other Materials, Parts, and Equipment

R&D 1.3 Trillion... Investment in 146 Core Strategic Items

[Asia Economy Reporter Moon Chaeseok] The government has decided to invest approximately 2.5 trillion KRW next year in materials, parts, and equipment such as semiconductors and displays. It will allocate 1.7 trillion KRW to research and development (R&D) and focus investments on 158+α core strategic items.

The Ministry of Trade, Industry and Energy announced that it will expand investment in materials, parts, and equipment to 2.5541 trillion KRW next year, a 23% increase compared to this year.

1.7 Trillion Invested in R&D... Support for 158+α Core Items

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy delivering opening remarks at the 'Special Committee on the Development of Materials, Parts, and Equipment Workforce' plenary meeting held on August 19 last year at the National Assembly Members' Office Building in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

This year, a special account for materials, parts, and equipment was established for the first time, with 2.0745 trillion KRW invested. Next year, the investment amount will be increased to proactively respond to the reorganization of the global value chain (GVC).

Specifically, 1.7348 trillion KRW will be invested in R&D, 437.9 billion KRW in infrastructure such as demonstration test beds, and 381.4 billion KRW in financial support, respectively.

Source: Ministry of Trade, Industry and Energy

Focusing on the 158+α core items presented in the 'Materials, Parts, and Equipment 2.0 Strategy' announced on July 9, 68% of the total, or 1.7 trillion KRW, will be concentrated investments.

R&D investment will be promoted in four directions: expanding investment in core strategic items, global expansion of demand-supply company cooperation models, and more.

886.6 Billion Invested in Materials and Parts Technology Development for Semiconductors and Displays

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy announcing the "Measures to Strengthen Competitiveness of Materials, Parts, and Equipment" to break away from the externally dependent industrial structure at the Government Seoul Office in Jongno-gu, Seoul, on August 5 last year. Photo by Kim Hyun-min kimhyun81@

886.6 billion KRW (a 47% increase from last year) will be invested in technology development for materials and parts such as semiconductors and displays, and 133.2 billion KRW (a 32.5% increase) in technology development for machinery and equipment industries.

The Ministry of Trade, Industry and Energy will invest 650 billion KRW in technology development for 146 out of the 158+α core strategic items in materials, parts, and equipment. Of this, 300 billion KRW will be invested in R&D for 60 new items.

Detailed projects will be planned based on the proportions of 32% for semiconductors and displays, 17% for electrical and electronics, 17% for machinery and metals, 15% for basic chemicals, and 10% for automobiles, and investments will be made accordingly.

Source: Ministry of Trade, Industry and Energy

Among the total investment, 370 billion KRW will be invested by collecting industry demand through a bottom-up approach.

This will be used for new industry R&D, support for top-tier materials, parts, and equipment companies (tentatively 30 billion KRW), cooperation models (35 billion KRW), and inter-ministerial collaborative R&D (20 billion KRW).

Currently, 2,233 candidate projects have been identified through industry demand surveys targeting six major sectors plus new industries (α). Early next year, industry opinions will be collected and expert reviews conducted before opening public calls.

Reviewing About 70 Candidate Items for New Industry R&D... Inducing Business Structure Transformation

At the '2019 Seoul Motor Show Press Day' held at KINTEX in Goyang, Gyeonggi Province, a Mercedes-Benz pre-briefing is underway. / Goyang = Photo by Kang Jin-hyung aymsdream@

The business structure will be guided to shift from internal combustion engine vehicles to electric vehicles. After reviewing about 70 candidate items for new industries, participating companies will be selected through public calls starting this year, and R&D will be promoted.

Through R&D on core materials and parts such as new materials and components, not only will the response capabilities of existing materials, parts, and equipment companies be strengthened, but business structure transformation will also be induced.

For example, to convert internal combustion engine vehicles to electric vehicles, technology development for materials and parts such as ▲ fossil fuel engines → drive motors, inverters ▲ transmissions → reducers ▲ air conditioning and intake/exhaust parts → PTC heaters, air intake and moisture distribution parts is required.

Source: Ministry of Trade, Industry and Energy

The Ministry of Trade, Industry and Energy will collect opinions from industry and others through the Industrial Technology R&D Information Portal early next year and proceed with the verification process of Request for Proposal (RFP) for projects. Participating companies will be selected in the first quarter and supported.

The ministry emphasized, "The core of responding to uncertainties caused by Japan's export regulations, COVID-19, GVC reorganization, and the transition to a low-carbon society lies in strengthening the competitiveness of the materials, parts, and equipment industry," adding, "We will consistently and strongly promote policies centered on the 'Materials, Parts, and Equipment 2.0 Strategy.'"

To this end, public-private cooperation and inter-ministerial collaboration will be strengthened.

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