'Power Struggle?'... Opposition Semiconductor Bill Similar to Yang Hyang-ja's Proposal

Industry Committee Opposition Whip Kim Han-jung Proposes... Similar Provisions on Exemption from Preliminary Feasibility Study Including Tax Rate Exclusion
Criticism of Forced Staging of 'Bipartisan Agreement Bill'

[Asia Economy Reporter Oh Ju-yeon] The ruling and opposition parties have begun full-scale discussions aiming to pass the Semiconductor Special Act, known as the ‘K-Chips Act’ (Amendment to the Act on National Advanced Strategic Industries and the Restriction of Special Taxation Act), by the end of this year. The pace has accelerated recently as Rep. Kim Han-jung of the Democratic Party, the ranking member of the National Assembly’s Industry, Trade, Energy, Small and Medium Business Committee, recently took the lead in submitting related bills following independent Rep. Yang Hyang-ja, who is serving as the chairperson of the People Power Party’s Semiconductor Special Committee. By jointly proposing the Semiconductor Special Act, the ruling and opposition parties have taken a step closer to the possibility of passing it within the year, but some voices say it appears as a ‘leadership competition’ due to the similarity of the bills.

The Special Measures Act on Strengthening and Protecting the Competitiveness of National Advanced Strategic Industries, known as the "Semiconductor Special Act," passed the National Assembly plenary session on the 11th. Photo by Yoon Dong-joo doso7@

On the 23rd, a member of the National Assembly’s Industry Committee said, "The industry is desperately waiting for the bill to pass, but the fact that the Democratic Party submitted a similar bill rather than following the bills already proposed makes it look like a fight over shares." Although the direction and content for supporting the domestic semiconductor industry are not significantly different between the ruling and opposition parties, there is criticism that they are trying to forcibly create the appearance of a ‘bipartisan consensus bill’ by differentiating some detailed items instead of a bill from a specific party. He added, "In any case, it is positive that the possibility of passing the bill has come closer," and said, "It would be good to see the ruling and opposition parties working together on the bill’s passage."

Yesterday, the Democratic Party proposed the ‘Partial Amendment to the Special Measures Act on Strengthening and Protecting the Competitiveness of National Advanced Strategic Industries.’ Since the current law, which has been in effect since August, has pointed out problems such as complicated local government approval processes and a lack of support systems and experts in advanced strategic industries like semiconductors, the amendment aims to supplement these issues.

In the amendment bill led by Rep. Kim Han-jung, to facilitate the rapid establishment of specialized complexes, the discretion of approval authorities is reduced, and the approval processing plan must be submitted to the Minister of Trade, Industry and Energy within a maximum of 30 days. In addition, for projects that need to be expedited to ensure national and economic security, stable industrial supply chains, and future competitiveness, preliminary feasibility studies can be exempted. Since the ruling party has also proposed multiple bills to support specialized complexes, the possibility of committee discussions is high, according to Rep. Kim’s office.

Overall, the bill is similar to the one independently proposed by Rep. Yang Hyang-ja in August. As the chairperson of the People Power Party’s Semiconductor Special Committee, Rep. Yang proposed amendments to the Act on National Advanced Strategic Industries and the Restriction of Special Taxation Act. Regarding the amendment to the Act on National Advanced Strategic Industries, Rep. Yang’s bill stipulates that "to facilitate the rapid establishment of specialized complexes, the approval authority must notify the project implementer of the approval processing results within 15 days from the date of submission of the approval processing plan, and in cases of unavoidable extension reasons, the period may be extended within 15 days."

Rep. Kim’s bill includes similar provisions. However, it differs in the timeline by stating, "To facilitate the rapid establishment of specialized complexes, the discretion of the approval authority is reduced, and the approval processing plan must be submitted to the Minister of Trade, Industry and Energy within a maximum of 30 days, and the approval authority that submitted the processing plan must notify the project implementer of the processing results within 15 days from the submission date."

Similarities are also found regarding the exemption from preliminary feasibility studies. Rep. Yang’s bill states, "Regarding infrastructure such as water supply and electricity that needs to be installed by public enterprises or public institutions, provisions on preliminary feasibility studies or exemptions may be applied, and special provisions on preliminary feasibility studies may add projects of public enterprises or quasi-public institutions under the Act on the Management of Public Institutions." Rep. Kim’s bill specifies, "For projects that need to be expedited to ensure national and economic security, stable industrial supply chains, and future competitiveness, preliminary feasibility studies may be exempted." This similarity in the bills has led to criticism that the competition over leadership and shares is occurring ahead of the bill’s passage. However, in the amendment to the Restriction of Special Taxation Act, there is a difference in tax benefits: Rep. Yang’s bill proposes corporate tax benefits between 20-30% with an additional 5% deduction, while Rep. Kim’s bill proposes benefits between 10-30% with an additional 5% deduction.

Meanwhile, the relevant standing committee, the Industry Committee, plans to hold a subcommittee meeting at the end of this month to conduct a joint review of the bills. Although it is difficult to guarantee passage during the regular session, the plan is to discuss so that it can be processed at least within the year.

Rep. Han Mu-kyung, the ruling party’s ranking member of the Industry Committee, said in a phone interview with Asia Economy on the same day, "There are bills submitted by three People Power Party members?Song Seok-jun, Park Seong-jung, and Yang Geum-hee?and also the bill submitted yesterday by Democratic Party Rep. Kim Han-jung, so we plan to collectively submit and conduct a joint review at the subcommittee." Rep. Han explained, "Although tentative, the subcommittee is scheduled to be held at the end of November. Even if the bill does not necessarily pass during the regular session, the goal is to process it by December."

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