K-Semiconductor Selected as National Power Technology... Expanded Tax Benefits for R&D and Facility Investment

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government has selected semiconductor core technologies as national strategic technologies and will significantly expand the tax credit rates for research and development (R&D) and facility investments. It will also promote a human resource development project through public-private joint investment, such as the establishment of a semiconductor contract department by Samsung Electronics and KAIST.

On the 1st, the government announced the follow-up progress and future plans of the 'K-Semiconductor Strategy' containing these details at the 12th Innovation Growth BIG3 Promotion Meeting.

Through the 'K-Semiconductor Strategy' announced last May, early achievements were made in deregulation and human resource development, and from the second half of this year, results supporting tax incentives, institutional improvements, and private investment will be produced.

As part of this, the Ministry of Trade, Industry and Energy and related ministries are reviewing plans to significantly expand the deduction rates for R&D and facility investments by selecting semiconductor core technologies as national strategic technologies. Currently, discussions on selecting national strategic technologies are underway focusing on major sectors such as memory, system, and materials, parts, and equipment (SoBuJang). The Ministry of Economy and Finance plans to announce the draft of national strategic technologies including these details through the tax law amendment bill this month and submit the amendment bill of the 'Restriction of Special Taxation Act' to the regular National Assembly session in September.

Regarding financial support, on the 8th of last month, a support program worth 1 trillion won plus alpha was newly established for small and medium-sized enterprises and mid-sized companies, and guidance is being provided to foundry, SoBuJang, and packaging companies with investment demand.

In the field of deregulation, starting from the 17th of last month, the government plans to initiate the revision procedures of related laws and notifications by the end of the year for follow-up tasks such as ▲ exemption from change permits when replacing radio application equipment ▲ relaxation of inspection exemption standards for imported containers ▲ inspection of representative facilities for multiple similar chemical substance facilities followed by overall licensing.

The semiconductor industrial complexes being established in Yongin and Pyeongtaek are currently conducting preliminary consultations for river occupation permits, and to attract foreign-invested companies for securing the domestic advanced equipment supply chain, they are pursuing ▲ securing EUV cluster sites ▲ designing production lines for building advanced equipment manufacturing facilities.

Regarding large-scale human resource development projects jointly invested by the public and private sectors, including the 'Samsung Electronics-KAIST semiconductor contract department establishment,' plans are underway to expand the project scale from 300 billion won to 350 billion won. This project will apply for preliminary feasibility study in the third quarter of this year and will also promote new projects to strengthen semiconductor practical education starting next year.

In addition, the government has defined semiconductors as an essential core strategic industry for national security and securing future manufacturing competitiveness and decided to promote the enactment of the 'Special Act on Strengthening and Protecting Competitiveness of National Core Strategic Industries (tentative name)' to foster the industry.

Minister of Trade, Industry and Energy Moon Seung-wook said, "It is a time when expanded support such as tax and financial support is necessary so that semiconductor manufacturing infrastructure, which major countries are competitively supporting, can be newly established or expanded first in Korea," and added, "Through the 'K-Semiconductor Strategy' to realize a comprehensive semiconductor powerhouse, I ask for active interest and efforts from related ministries and the private sector to establish a mid- to long-term growth foundation for the domestic semiconductor industry."

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