Semiconductor Special Act Stalls... Uncertain 'Chogyeokcha Future'

Despite the Car Semiconductor Crisis, Stalled for Over Half a Year
Political and Ministry Disagreements Hinder Legislation
Even if Passed in Tomorrow's Subcommittee, Half-Measure Possibility Raised

[Asia Economy Reporters Heungsun Kim and Chaeseok Moon] As the global competition for semiconductor supremacy intensifies, the enactment of the essential 'Semiconductor Special Act' to strengthen the competitiveness of the domestic semiconductor industry has been stalled for over half a year. This is due to unresolved differences between the political sphere and government ministries over certain provisions of the Semiconductor Special Act, such as exemptions from preliminary feasibility studies. This contrasts with the United States, Europe, China, and Taiwan, which are competitively rolling out support measures to attract semiconductor production facilities and enhance technological capabilities within their own countries. Meanwhile, Korean companies like Samsung Electronics and SK Hynix are fiercely continuing their efforts to develop next-generation semiconductors to widen their technological lead.

According to the government and related industries on the 30th, the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee (SanJaWi) plans to hold a subcommittee meeting on the 1st of next month to discuss the 'National Core Strategic Industry Special Act' to support the semiconductor industry, but significant differences with government ministries remain.

At the SanJaWi subcommittee meeting held on the 23rd, the Ministry of Economy and Finance and the Ministry of Science and ICT expressed that they find it difficult to accept some provisions of the National Core Strategic Industry Special Act, which was proposed last month. Both ministries maintain their stance against accepting overlapping items related to preliminary feasibility study exemptions.

As a result, the bill, which aimed to pass through the National Assembly this year, is likely to be either scrapped or only partially enacted. A Ministry of Economy and Finance official stated, "It is true that we have expressed opposition to the special act," adding, "The Ministry of Science and ICT, which is currently conducting R&D preliminary feasibility studies, also finds acceptance difficult."

Discussions on enacting the Semiconductor Special Act became more concrete following the expanded economic ministers' meeting chaired by President Moon Jae-in in April. Since December last year, a global shortage of automotive semiconductors has occurred, turning the supply chain competition surrounding semiconductors into a geopolitical struggle for supremacy among nations.

Initially, semiconductor-related associations and academia requested the enactment of a 'Special Act for the Promotion of the Semiconductor Industry' to enhance policy speed and effectiveness at the government-wide level by fostering human resources, providing tax benefits, and building infrastructure. Subsequently, the ruling party expanded and reorganized the Semiconductor Technology Special Committee and began preparing the special act. However, nearly six months have passed while coordinating differences during consultations with government ministries, and the scope has expanded to include not only semiconductors but also batteries and bio-health under the National Core Strategic Industry Special Act.

An industry insider said, "Due to public opposition against providing benefits to only specific industrial sectors, additional industries requiring support were included, which has somewhat diluted the focus compared to the originally anticipated Semiconductor Special Act."

In this situation, the semiconductor sector, a key export item for South Korea, is also facing unfavorable conditions. Semiconductor inventory, an indicator used to assess the semiconductor market, increased by more than 30% compared to September as of last month, and rose over 26% compared to the same period last year.

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