US Invests 300 Trillion Won, China 180 Trillion Won... South Korea Faces 'Darkness' Even in Coordinating Differences

The Heated Global Semiconductor Hegemony War... Korea Still Unable to Find a Breakthrough
In April, President Moon Expressed Intent for Legislation but Support Measures Remain Unreleased

[Asia Economy Reporter Lee Hyeyoung] The Semiconductor Special Act, which began gaining momentum after President Moon Jae-in referred to the semiconductor industry as a "core national strategic industry" last April, has been stalled for eight months primarily due to significant disagreements between the ruling party and the government regarding the exemption from integrated preliminary feasibility studies.

The industry has proposed that instead of handling feasibility study exemptions on a case-by-case basis as is currently done, all feasibility study exemption projects related to the semiconductor industry should be integrated and processed at once to accelerate investment. This proposal was incorporated into the National Core Strategic Industry Special Act (formerly the Semiconductor Special Act).

However, the Ministry of Economy and Finance opposes this, arguing that since the benefits included in the Semiconductor Special Act, such as preliminary feasibility studies, are already stipulated in the National Finance Act, explicitly adding them separately could undermine the entire feasibility study system. As a result, the Semiconductor Special Act is at risk of being scrapped.

An official from the Ministry of Economy and Finance explained, "The National Finance Act already includes provisions allowing exemptions for matters deemed urgently necessary from a policy perspective. Creating a special act that separately regulates procedures, expedited processing, and exemptions could infringe upon the feasibility study framework established by the National Finance Act."

Ultimately, as global supply chain issues intensified, President Moon personally expressed his determination to enact related legislation and began accelerating efforts. However, eight months later, as of November, the government's 'support fire' has produced no tangible outcomes beyond a consensus on the need for support.

Recently, Samsung Electronics officially announced its investment in a second foundry plant in the United States, receiving nearly 5 trillion won in support through unprecedented incentives, subsidies, and tax reductions. This development has further darkened the outlook for the domestic situation. In June, the U.S. Senate passed the 'U.S. Innovation and Competition Act,' which allocates a total of $250 billion (approximately 300 trillion won) to sectors including semiconductors, 5G, and artificial intelligence (AI). According to The Washington Post and others, U.S. Secretary of Commerce Gina Raimondo mentioned the semiconductor shortage on the 29th (local time) and pressured the House to swiftly pass the bill, with ministries and ministers fully committed to ensuring the legislation's passage.

Most major countries competing with Korea for semiconductor supremacy have reached broad political and bureaucratic consensus on support plans and strategies. However, in Korea, disagreements between the ruling party and government over the bill remain ongoing, leaving the enactment and implementation of the related special act shrouded in uncertainty. This is why there are criticisms that despite bold promises to achieve a 'super-gap,' no control tower appears to be coordinating the resolution of differences.

In particular, the Ministry of Economy and Finance has consistently expressed reservations about the National Core Strategic Industry Special Act proposed by the ruling party, especially regarding the selection of targets (semiconductors, COVID-19 vaccines, secondary batteries), mandatory expedited processing, and exemption from preliminary feasibility studies, leading to forecasts that the bill's enactment may be delayed beyond this year.

An Gi-hyun, Executive Director of the Korea Semiconductor Industry Association, said, "It is necessary to once again recall the background behind the discussions on enacting the special act. Since this special act is being pursued to avoid losing the future amid intensifying global competition, tax benefits and exemption policies promoted by the government should also be decided based on this foundation."

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