Yoon Says "Life or Death," Political Circles Ignore... The Reality of Han Semiconductor

Yoon Suk-yeol Emphasizes 'Semiconductors' Again
Special Law Adrift... Expected to Be Submitted This Month
Yang Hyang-ja "Please Help Pass the K-Chips Act"

President Yoon Suk-yeol. [Photo by Yonhap News]

[Asia Economy Reporter Han Yeju] "The semiconductor industry is a matter of life and death for us." (On the 14th, at a luncheon with the People Power Party's Special Committee for Strengthening Semiconductor Industry Competitiveness, President Yoon Suk-yeol)

As President Yoon Suk-yeol once again emphasized support for the semiconductor industry, criticism is mounting against the political sphere's 'ignore-it' attitude. Contrary to President Yoon's determination, who has identified semiconductor development as one of the core tasks since before his inauguration, the domestic political arena remains focused solely on political strife without even submitting the 'K-Chips Act (Semiconductor Special Act)'. While competing countries such as the U.S. and China are providing massive financial and policy support to protect and foster their semiconductor industries, concerns are rising that Korean semiconductor companies' competitiveness may deteriorate due to the backward behavior of the political sector.

According to business and political circles on the 15th, at a luncheon held the previous day with Special Committee Chair Yang Hyang-ja and other committee members, President Yoon said, "Semiconductors are the rice of industry and an important field in the Fourth Industrial Revolution," adding, "As president, I must always prepare for the nation's future food sources, and semiconductors are not just a long-term task but an urgent issue requiring real-time response."

Although President Yoon emphasizes a 'speed race,' the K-Chips Act proposed by the Semiconductor Special Committee has yet to gain momentum.

Earlier, the K-Chips Act, jointly proposed by Chair Yang on July 4, consists of two bills: the 'Amendment to the Special Measures Act for Strengthening and Protecting National Advanced Strategic Industry Competitiveness' and the 'Amendment to the Restriction of Special Taxation Act.' The core provisions include exemption from preliminary feasibility studies and shortening of permit processing periods for advanced industries such as semiconductors, along with various tax benefits for companies.

However, opposition parties have stalled progress by raising issues about the deliberation period. The bill review criteria set a deadline of July 15 for submission, preventing it from advancing to the standing committee. Members of the People Power Party on the Industry, Trade, Small and Medium Enterprises Committee proposed applying exceptions to the Semiconductor Special Act amendment considering the global crisis, but the opposition opposed it. Various bills aimed at providing faster infrastructure and supporting talent development for semiconductor companies were mostly excluded from the agenda.

Currently, unlike other countries where the government naturally takes responsibility for water and electricity supply when establishing new factories, in Korea, companies must pay premiums to resolve these issues themselves. The Yongin cluster project, in which SK Hynix planned to invest 120 trillion won but is currently stalled, is a representative example.

This sharply contrasts with the United States, which rapidly processes domestic industry protection laws. The U.S. Democratic Party, unable to reconcile differences with the Republicans over the Chips and Science Act (CSA) that provides substantial benefits to domestic semiconductor companies, separated the core support measures into a revised bill. This law passed both the House and Senate in July and was signed by U.S. President Joe Biden on August 9. The Inflation Reduction Act (IRA), which supports domestic electric vehicles, passed the Senate on August 7, the House on August 12, and was signed by the president on August 16, taking less than two weeks for final processing.

China is also pouring national-level support to complete its semiconductor rise, and Japan has prepared an additional supplementary budget of 774 billion yen (approximately 7.4 trillion won) this year to support the semiconductor industry.

Experts point out that the semiconductor industry loses competitiveness the longer decisions are delayed. An industry insider said, "Subsidy bills introduced by major countries are significant constraints on the competitiveness of our export-dependent companies," adding, "The Semiconductor Special Act must be promoted as soon as possible to foster the semiconductor industry, which has emerged as a core resource for national security."

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