Semiconductor Industry Grows Hopeful with Yoon's Promise of Industrial Promotion... "Regulatory Easing First" (Comprehensive)

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 and Jinho Kim] "Semiconductors have been the backbone of our country. The international competition is so fierce that if we look away 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 the government's 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 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, marking a 26.8% growth compared to a year ago. This is the second-highest sales figure following December last year’s record of $50.9 billion. Last year’s semiconductor sales totaled $555.9 billion, a record high with a 26.2% increase over 2020, and this year’s growth rate continues to exceed 25%.

As the global semiconductor market expands, governments worldwide are competing to ease regulations to foster the industry. The semiconductor sector’s highest 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 realized 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 yet to break ground even 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, "With the U.S., Europe, China, and Japan competitively attracting 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 currently only have strengths in the memory sector."

◆Semiconductor Fund and Training 100,000 Talents

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

The industry views the ‘Koma Tech Fund,’ created with 50 trillion won from government funds and private company contributions, as enabling the growth of domestic fabless (design) and foundry (contract manufacturing) sectors, thereby creating 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 Koma Tech 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 investments, as well as increasing the number of semiconductor-related student quotas 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 majors.

Since this could solve the issue of semiconductor admission quotas at universities in the metropolitan area, the industry and experts have given positive evaluations. Professor Cho Joong-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 for semiconductor support to the new government," adding, "Once the presidential transition committee is formed, we are preparing to communicate the industry’s needs."

10 Years of Korea-U.S. FTA... Playing a Central Role in ‘Supply Chain Strengthening’ Including Semiconductors

Marking the 10th anniversary of the Korea-U.S. Free Trade Agreement (FTA) this year, it is evaluated as having played a key role in expanding trade and investment between the two countries and strengthening supply chain ties. The recent presidential election also shows signs of strengthening the Korea-U.S. alliance, which is optimistic. U.S. President Joe Biden has shown great interest in the semiconductor industry, holding discussions this year with global companies including Samsung Electronics on semiconductor supply and supply chain measures. It is reported that when he congratulated President-elect Yoon by phone, he also mentioned alliance issues related to the semiconductor supply chain.

The Korea International Trade Association’s International Trade and Commerce Research Institute, in its report ‘Evaluation and Tasks of 10 Years of Korea-U.S. FTA’ published on the same day, analyzed that Korean investment in the U.S. has significantly increased centered on semiconductors, batteries, and electric vehicles, contributing to expanding production bases and job creation in the U.S., while providing Korean companies with market expansion opportunities. It also evaluated that the Korea-U.S. FTA played a central role in strengthening supply chain cooperation between the two countries, analyzing that in the semiconductor industry, a strong value chain was built based on the U.S.’s strengths in design and Korea’s strengths in manufacturing on a stable investment foundation.

Senior Researcher Yoo Jin Lee of the Korea International Trade Association suggested, "It is necessary to consider how to link the cooperative relationship between the two countries through the Korea-U.S. FTA to new regional economic security alliance discussions."

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