"Urgent Need for Deregulation"... Industry Optimism Rises with Yoon's Semiconductor Development Promise

Rapid Growth in the Global Semiconductor Market... Governments Race to Support
President-Elect Yoon Seok-yeol Emphasizes Semiconductor Development as Top Priority
From Funds and Training 100,000 Talents to Future City Promises

[Asia Economy Reporters Sunmi Park, Jinho Kim] "Semiconductors have sustained our country. The international competition is so fierce that if we look away even for a moment, our future could become bleak."

Yoon Seok-yeol, the president-elect of the 20th Republic of Korea, made this remark during his campaign tour last month through Anseong, Yongin, and Seongnam, explaining why the semiconductor industry, which accounts for 20% of our exports, must be intensively supported.

Since President-elect Yoon has emphasized the development of the semiconductor industry as part of strengthening economic security during the election campaign, the industry has high expectations that government support for the semiconductor sector will show progress in regulatory relaxation for infrastructure development, active investment attraction and incentive provision, and support for training semiconductor experts.

◆"Top Priority Expectation is Regulatory Relaxation"=According to statistics from the U.S. Semiconductor Industry Association (SIA) on the 11th, global semiconductor sales in January this year reached $50.74 billion, a 26.8% increase compared to a year ago. This is the second-highest sales figure following December last year’s record high of $50.9 billion. Last year’s semiconductor sales totaled $555.9 billion, marking a record 26.2% increase over 2020, and this year is maintaining a growth rate exceeding 25%.

As the global semiconductor market expands, governments worldwide are competing to ease regulations to grow the industry. The semiconductor industry’s greatest expectation from President-elect Yoon is regulatory relaxation.

An industry insider said, "Currently, Korea’s semiconductor industry faces many regulatory obstacles that delay the execution of investment plans once private companies establish them," emphasizing, "It is necessary to introduce an effective fast-track system to shorten the time and procedures so that companies’ investment plans can be implemented promptly." The insider also added, "To expand semiconductor infrastructure, not only administrative procedure simplification but also urgent support to resolve regional conflicts and conflicts of interest arising during infrastructure development is needed."

In fact, although Korea had early plans to foster the semiconductor industry, infrastructure expansion has been blocked by various regulations. For example, Samsung Electronics’ Pyeongtaek semiconductor plant took seven years to become operational, and SK Hynix’s Yongin semiconductor cluster has not even broken ground three years after receiving approval.

One of President-elect Yoon’s key semiconductor policies is the ‘Semiconductor Future City’ strategy, which aims to establish semiconductor hubs in major cities nationwide. This is why there is great expectation that broad regulatory relaxation will accompany infrastructure expansion. Another industry insider said, "As the U.S., Europe, China, and Japan competitively vie to attract semiconductor factories, Korea’s need to attract investment for supply chain strengthening and building a robust ecosystem is growing," adding, "Regulatory relaxation could also lead to foreign companies investing in Korean semiconductors, providing a foundation to complement Korea’s semiconductor weaknesses, which are strong mainly in the memory sector."

◆Semiconductor Fund and Training 100,000 Talents= Among the semiconductor-related pledges presented by President-elect Yoon are the ‘KomaTech Fund’ (tentative name), jointly funded by the public and private sectors, and the training of 100,000 talents. The plan to establish the ‘KomaTech Fund’ with 50 trillion won of government funds and contributions from semiconductor companies was originally a pledge by Yoon Seung-min, a member of the People Power Party, during the presidential primary, but was later absorbed by President-elect Yoon.

The industry views the ‘KomaTech Fund,’ created with 50 trillion won of government funds and private company contributions, as enabling the growth of domestic fabless (design) and foundry (contract manufacturing) sectors, thereby fostering a balanced semiconductor ecosystem. An industry insider said, "Since the fabless and foundry sectors are considered somewhat less competitive in Korea, there is indeed anticipation for the establishment of the KomaTech Fund," and predicted, "As the pledge becomes more concrete, organic cooperation with the new government for industry development will take place."

Expanding tax credits for research and development (R&D) and facility investment, as well as increasing student quotas related to semiconductors to train ‘100,000 talents,’ are also highly anticipated by the industry. In particular, President-elect Yoon has argued for establishing semiconductor departments at regional universities and providing opportunities for non-majors to switch to semiconductor majors.

This is positively evaluated by the industry and experts as it could solve the issue of semiconductor admission quotas at universities in the Seoul metropolitan area. Professor Jo Jung-hwi of the Embedded Systems Engineering Department at Incheon National University said, "It is an important time to find ways to nurture excellent semiconductor talents not only in the metropolitan area but also in regional areas." Another industry insider said, "We are currently gathering opinions to actively appeal to the new government for semiconductor support," adding, "Once the presidential transition committee is formed, we are preparing to communicate the industry’s needs."

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