The Semiconductor Special Act That Started with a Bang Seems to Extend Beyond the Year... Korean Semiconductors Facing Global Challenges

Difficulty Passing Within the Year Amid Presidential Election Phase... Urgent Need for Swift Handling of Deregulation and More

[Asia Economy Reporter Jeong Hyunjin] "I hope people will look at the semiconductor industry not simply as something to be supported, but as an investment for the future, returning to the original mindset."

A domestic semiconductor industry insider expressed deep regret on the 28th that the 'Semiconductor Special Act' has not passed the National Assembly. Until the first half of this year, as the global semiconductor hegemony war intensified centered on the US, China, and Europe, there was great expectation that the domestic semiconductor industry would receive active support to enhance its competitiveness. However, as discussions on the Semiconductor Special Act, which supports the semiconductor industry, have slowed, it is expected to be difficult for the bill to pass the National Assembly within this year, deepening the industry's sighs. The insider appealed, "The bill needs to pass quickly so that our companies can gain greater competitiveness in the market at the appropriate time."

According to political and business circles, the 'Special Measures Act on Strengthening and Protecting the Competitiveness of National Advanced Strategic Industries,' known as the Semiconductor Special Act, is currently pending in the Legislation and Judiciary Committee. The industry demands prompt legislation, saying "the semiconductor battle is ultimately about timing," but with the National Assembly entering the presidential election phase, the likelihood of the bill passing within this year is low.

The start was spectacular. The Democratic Party launched the Semiconductor Special Committee in April and boldly announced that the Semiconductor Special Act would be proposed by July, but the actual bill was only proposed at the end of October. Even after the bill was proposed, opinions emerged that voices from other industries such as batteries and displays should also be reflected, and disagreements arose among related ministries including the Ministry of Economy and Finance, Ministry of Trade, Industry and Energy, and Ministry of Science and ICT, preventing the legislation from progressing quickly. In this process, contents related to talent supply, such as increasing quotas for universities in the Seoul metropolitan area, which the semiconductor industry wanted, were omitted.

The Ministry of Trade, Industry and Energy, the supervising ministry, recently stated it would strive to have the bill passed in the December extraordinary session of the National Assembly, leaving the possibility that the special law could be enacted as early as January next year. Along with legislative efforts, the government has pledged to manage the 'K-Semiconductor Strategy' announced in May to proceed without setbacks and support corporate investments to strengthen domestic semiconductor manufacturing capabilities, but it remains to be seen whether this support will proceed as planned. Considering the semiconductor boom, the industry is making large-scale investments such as factory expansions and is accelerating support measures like shortening approval procedures and easing regulations.

While the K-semiconductor industry is blocked by legislation, major countries such as the US, China, Europe, and Japan are pouring out not only bills but also policy support to secure semiconductor supply chains domestically. The Biden administration, which took office in January, expressed its determination to build a semiconductor supply chain centered on the US. Since then, it has actively requested Samsung Electronics, Taiwan's TSMC, Intel, and others to invest in production facilities in the US, and most have decided to build semiconductor factories in the US this year. The US CHIPS Act, proposed last year, includes $52 billion in support for the industry, passed the Senate in June, and is currently pending in the House of Representatives.

Japan allocated 600 billion yen (approximately 6.2578 trillion won) in the supplementary budget for fiscal year 2021 to support advanced semiconductor production companies and submitted two related amendment bills to the extraordinary Diet session. If the bills pass, Taiwan's TSMC, which is planning to establish a factory in Kumamoto Prefecture, Japan, is expected to be the first to receive support. Japan is actively securing its semiconductor supply chain, which had collapsed, to the extent of investing tax money to attract production facilities of key overseas companies. The European Union (EU) is also preparing special laws and support measures to build a semiconductor production base within the region and is negotiating with key semiconductor companies such as Intel and TSMC.

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