Hong Nam-ki "Approval of 8 Small and Medium Parts Cooperation Projects Including Car Semiconductors... 65 Additional Future Leading Items Selected"

Holding of the Committee for Strengthening Competitiveness in SoBuJang

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] On the 25th, the government announced that it will approve eight cooperation projects between demand and supply companies for the development of materials, parts, and equipment, including automotive semiconductor components and rare earth permanent magnets for electric vehicles. Additionally, 65 future-leading items were newly selected to secure the future supply chain of materials, parts, and equipment (SoBuJang).

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki held a meeting of the Materials, Parts, and Equipment Competitiveness Enhancement Committee at the Government Seoul Office and presented and approved the agenda for the cooperation project approval. Most of the newly discovered cooperation models are related to the automotive industry, which has recently experienced semiconductor shortages. Besides collaborative research and development-purchase linkage, new cooperation methods such as domestic investment by overseas companies and domestic return of overseas expansion companies were also added, Hong explained.

Through this approval, the government plans to support research and development (R&D), funding, tax benefits, workforce, and special exceptions for environmental and labor regulations tailored to corporate demand. It expects about 140 billion KRW in private investment and the creation of approximately 500 new jobs by 2025 through project implementation. The government will also promote customized support for five regional SoBuJang specialized complexes: Gyeonggi (semiconductors), Jeonbuk (carbon materials), Chungbuk (secondary batteries), Chungnam (displays), and Gyeongnam (precision machinery).

The specialized complexes focus on strengthening the linkage between demand and supply companies, which are core to SoBuJang, through test beds and joint R&D, with support plans tailored to each complex. For the Gyeonggi semiconductor complex, expansion of infrastructure such as power, water supply, and wastewater treatment will be prioritized. The Jeonbuk carbon complex, where large companies are suppliers and small and medium enterprises are demand companies, will focus on discovering demand through joint R&D among companies. The Chungbuk secondary battery complex, where product safety is critical, will focus on establishing a demonstration base with 32 types of testing equipment. The Chungnam display complex, which lacks materials and parts companies within the complex, plans to review designation as an advanced investment zone offering benefits such as land use exceptions, burden fee reductions, and regulatory free zone linkage support to facilitate company attraction. The Gyeongnam precision machinery complex, which has been established for a long time, will focus on AI-based ultra-precision processing equipment development and digital manufacturing innovation to advance manufacturing technology.

On the same day, the government announced the additional selection of 65 future-leading items related to key industries such as semiconductors (27 items) and new industries such as bio (38 items) to secure the future supply chain of SoBuJang. Deputy Prime Minister Hong said, "For the selected items, we will not only provide stable mid- to long-term R&D investment but also relax the '3 projects 5 participations' rule (where a principal investigator can participate in up to 3 projects and a co-researcher up to 5 projects) and allow modifications to research directions and goals according to domestic and international environmental changes." He added, "Evaluations will be conducted over a long-term period of more than three years to encourage long-term research and focus on maximizing creative R&D outcomes."

The government also presented customized support plans for SoBuJang top-tier companies. It selected 22 top-tier companies specialized in core strategic technologies of SoBuJang and will support them with up to 25 billion KRW over five years. By 2024, a total of 100 SoBuJang top-tier companies will be selected and intensively nurtured. Deputy Prime Minister Hong emphasized, "We will prepare customized support plans for the 22 SoBuJang top-tier companies and present over 100 cross-ministerial support projects as a menu. Through this, we will provide close support to companies throughout the entire cycle of technology development, commercialization, and global expansion for five years, and steadily implement the growth ladder strategy for SoBuJang specialized companies, linking Startup 100, Small Giant 100, and Top-tier Company 100."

Regarding the achievements of SoBuJang policies so far, Deputy Prime Minister Hong evaluated, "We have greatly stabilized core SoBuJang items, provided an opportunity to enhance the competitiveness of the entire industry, and follow-up measures have been steadily implemented." He continued, "SoBuJang policies were efforts to address supply chain vulnerabilities with Japan, but ultimately, they proactively prepared for the global supply chain (GVC) vulnerabilities rapidly caused after COVID-19. Recently, as GVC issues such as US-China semiconductor competition and secondary battery competition have emerged as major issues, Korea has effectively prepared supply chain stabilization policies two years ahead."

He also stressed, "Enhancing the competitiveness of the SoBuJang industry is not only important for building a stable supply chain but also has significant meaning in preparing for the 4th Industrial Revolution, digital economy transition, and fostering future new industries. Until now, SoBuJang measures have been pursued with a five-year focus on supply chain stability, but going forward, it is necessary to extend the timeframe to more than five years, considering future leading aspects."

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