Government to Invest 2.3 Trillion Won in SoBuJang R&D This Year... Also Plans to Amend Special Act

‘The 9th Committee on Strengthening Competitiveness of Materials, Parts, and Equipment’ Held
Deliberation and Resolution on the ‘2022 Implementation Plan for Strengthening SoBuJang Competitiveness’

[Asia Economy Sejong=Reporter Lee Jun-hyung] The government will invest 2.3 trillion KRW this year in technology development for materials, parts, and equipment (SoBuJang). It is also planning to include critical minerals in the scope of SoBuJang through amendments to the Special Act.

The Ministry of Trade, Industry and Energy announced on the 3rd that it held the 9th Materials, Parts, and Equipment Competitiveness Enhancement Committee at the Government Seoul Office. At the meeting, the ‘2022 Materials, Parts, and Equipment Competitiveness Enhancement Implementation Plan,’ which the government must establish annually under the SoBuJang Special Act, was reviewed and approved. Five new cooperative projects between demand and supply companies were also decided to be launched to secure future new industries and new material supply chains.

According to the SoBuJang Competitiveness Enhancement Implementation Plan, the government will invest 2.3 trillion KRW in SoBuJang research and development (R&D) this year. The 100 core strategic technologies, which have not changed since 2019, will be reorganized considering changes in domestic and international technology environments and the progress of supply stability by item. Four technologies in the vaccine and advanced bio fields will be prioritized and added to the core strategic technologies starting from the first half of this year.

Core strategic technologies added to the target technologies.
[Photo by Ministry of Trade, Industry and Energy]

The government will also support SoBuJang companies’ entry into global supply chains by amending the SoBuJang Special Act. The amendment plan includes expanding the scope of SoBuJang to raw materials such as critical minerals. Support policies such as diagnosing supply chain vulnerabilities will also be added. Furthermore, 20 top companies, 20 strong small and medium enterprises, and 20 startups specialized in core strategic technologies will be additionally selected and supported, and a SoBuJang policy fund worth 100 billion KRW will be established.

The development of SoBuJang clusters is also expected to accelerate. The government will actively promote the creation of cooperative ecosystems within five specialized complexes, including Gyeonggi (semiconductors), Jeonbuk (carbon materials), and Chungbuk (secondary batteries). It is also considering designating SoBuJang specialized complexes as advanced investment zones. The income corporate tax and customs duty exemption period for returning companies will be extended by three years from the end of last year to the end of 2024, and investment-related incentives will be expanded.

Improvement Plan for the SoBuJang Cooperation Model by the Ministry of Trade, Industry and Energy.
[Photo by Ministry of Trade, Industry and Energy]

Five new cooperative and win-win model projects between demand and supply companies were also newly approved. According to the SoBuJang Special Act, the Ministry of Trade, Industry and Energy approved 45 cooperative models by November last year, providing package support including R&D and finance. The five newly approved projects consist of three cooperative models discovered by the Ministry of Trade, Industry and Energy and two win-win models discovered by the Ministry of SMEs and Startups. The newly approved cooperative models include three items: next-generation organic light-emitting diode (OLED) materials, purpose-built vehicle (PBV) materials, and optical sensors and parts for autonomous driving robots for vehicle transport. The government plans to support the three newly approved cooperative models with R&D funds totaling 55 billion KRW and regulatory exemptions.

The Ministry of Trade, Industry and Energy expects the cooperative model projects to create 900 jobs by 2026. The fields for discovering cooperative models will be expanded from the existing 100 core strategic items against Japan to economic security items. The ministry plans to improve the discovery process by conducting continuous open recruitment and acceptance to activate new cooperative model proposals.

Park Jin-gyu, First Vice Minister of the Ministry of Trade, Industry and Energy, said, “The Russia-Ukraine situation has increased public interest and concerns about a stable SoBuJang supply chain,” adding, “We will build an unwavering supply chain across all fields, extending beyond the existing advanced technology-centered SoBuJang to general-purpose products and energy such as petroleum and gas.”

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