Progress in Core Materials, Parts, and Equipment 'Localization'... Government to Support 2.2 Trillion KRW for Materials, Parts, and Equipment R&D This Year

Implementation of Measures to Strengthen SoBuJang Competitiveness for 1 Year and 6 Months
Ministry of Industry: "Progress in Stabilizing Supply of 3 Major Export-Regulated Items"... Technology Development for 85 out of 100 Major Items Exported to Japan
This Year, Total Support of 2.5 Trillion Won Including 2.2 Trillion Won SoBuJang R&D Investment... Expanding Foundation for Global Expansion

[Image source=Yonhap News]

[Asia Economy Reporter Haeyoung Kwon] #Company A, a manufacturer of hydrogen fluoride, a raw material for semiconductor production. After Japan implemented export restrictions on three major items including hydrogen fluoride in 2019, demand surged rapidly, prompting the company to request the government for expedited administrative procedures to expand production. The government promptly granted factory expansion permits through the 'SoBuJang (Materials, Parts, and Equipment) Supply Response Support Center' and provided one-stop support to Company A, including approval for special extended working hours for hydrogen fluoride manufacturing and mass production research and development (R&D).

#Company B, a developer of automotive sensor materials. Receiving an 8 billion KRW investment from the government promoting SoBuJang localization, Company B embarked on material development. Company B succeeded in developing related technologies, and two domestic completed car manufacturers chose Company B’s products over Japanese ones for more than seven types of 2020 model vehicles. In the automotive sensor material market, where Japanese companies such as Murata hold 60% of global supply, domestic products have begun to replace Japanese products.

The Ministry of Trade, Industry and Energy announced on the 24th in the 'SoBuJang Company Field Report' that during the 1 year and 6 months since the implementation of measures to strengthen SoBuJang competitiveness, progress was made in stabilizing the supply of the three major export-restricted items?hydrogen fluoride, photoresist, and fluorine polyimide?along with the full-scale securing of technology through R&D prototype development and mass production, and commercialization achievements worth 19.6 billion KRW through mass production evaluation by demand companies. Since Japan’s export restrictions in July 2019, the government has focused on strengthening SoBuJang competitiveness through public-private cooperation, supply chain stabilization, and responding to global value chain (GVC) restructuring.

The government supported the expansion of production facilities for SoBuJang manufacturers such as Soulbrain, diversified import sources of the top 100 items from Japan to the European Union (EU) and the United States, and increased the average inventory level per item to more than twice the previous level. Centered on the Supply Response Support Center, the government continuously monitored supply and demand trends of over 7,000 companies and provided one-stop support to resolve 803 supply difficulties.

Efforts to build an ecosystem through cooperation between SoBuJang demand and supply companies are also being strengthened. Among 25 items supported by the government immediately after Japan’s export restrictions, prototypes for 23 items were developed, and 434 patents were filed. The government has currently invested a total of 2 trillion KRW targeting 100 major items, with technology development underway for 85 items by companies.

Demand companies have opened their mass production lines to allow evaluation of mass production performance. The government has supported 26.2 billion KRW for 262 projects so far, with 113 companies obtaining performance certification and successfully commercializing projects worth 19.6 billion KRW. The number of demand companies participating in mass production line openings reached 74 last year, including 25 large corporations, expanding more than sixfold compared to the previous year.

Additionally, the SoBuJang Technology Strategy Advisory Group, composed of public research institutes and excellent universities, resolved 153 technical difficulties. In the case of Company S, consultation helped shorten the bracket processing time used in electric vehicle engines. The process time is expected to be reduced by 30%, and production volume is projected to increase by 125% compared to before.

Furthermore, to expand exports in the global market, 22 top-tier companies were selected, and a fund worth 862.6 billion KRW focusing on SoBuJang companies was established, investing 356.4 billion KRW in four projects so far. With support measures such as expanded cash incentives and increased return subsidies, the number of SoBuJang return companies (large and medium-sized enterprises) increased from only two in 2017 to 18 in 2020, achieving a record high.

The government plans to further increase support for SoBuJang localization this year. The SoBuJang budget will rise from 2.0745 trillion KRW last year to 2.5541 trillion KRW this year. Among this, 2.2 trillion KRW will be invested in R&D for supply chain core items, bio, system semiconductors, future vehicles, and carbon neutrality. Through technology cooperation with global companies, expansion of global networks, and support for SoBuJang investment funds, the government will also strengthen the global advancement foundation for SoBuJang companies.

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy stated, "Despite repeated supply chain shocks, the efforts of the people and companies over the past 1 year and 6 months have wisely overcome these challenges, and these efforts are gradually becoming visible as results." He added, "The government will spare no policy efforts to help our SoBuJang industry leap forward as a global powerhouse."

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