Semiconductor Industry Expected to Shrink 4% This Year... KITA's Jeong Manki Calls for Corporate Tax Cut

Vice Chairman Jeong Manki Holds 4th Emergency Measures Meeting
"Urgent Passage Needed for Semiconductor Facility and R&D Tax Credits"

[Asia Economy Reporter Han Ye-ju] Chung Man-ki, Vice Chairman of the Korea International Trade Association, argued that the corporate tax burden on semiconductor companies should be reviewed to be at a level equal to that of foreign countries.

Vice Chairman Chung made this statement on the 18th at the Trade Center in Samseong-dong during the "4th Emergency Industry-Specific (Semiconductor, Display, Electronic Information and Communication Industry) Countermeasure Meeting for Overcoming Export Difficulties and Expansion."

Chung said, "The export outlook for the semiconductor, display, home appliance, and information and communication industries this year is expected to be bleak. In the case of semiconductors, the global market is projected to contract by 3-4% this year, centered on memory semiconductors. Our exports, which are mainly memory semiconductors sensitive to economic fluctuations, are expected to face difficulties."

He continued, "As the paradigm of global trade shifts from free trade to subsidy expansion and other forms of economic nationalism prioritizing domestic industries, it is desirable that the government has expanded tax credits for facilities and research and development (R&D) investments in semiconductors and related sectors to create a competitive environment equal to that of the US, Taiwan, and China. The National Assembly should promptly pass the related bill within February," he emphasized.

At the "4th Emergency Industry-Specific Countermeasure Meeting for Overcoming Export Difficulties and Expansion" held on the 18th at the Trade Center in Samseong-dong, Jeong Manki, Vice Chairman of the Korea International Trade Association, is speaking.
[Photo by Korea International Trade Association]

He stated, "The effective corporate tax rates for Samsung and SK are 25.2% and 28.3%, respectively, whereas competing companies such as TSMC at 10.0%, Intel at 8.5%, and SMIC at 3.5% bear a lighter corporate tax burden. It is necessary to actively consider corporate tax reductions to provide conditions equal to those of foreign competitors."

Regarding the semiconductor workforce shortage, he said, "The estimated demand for new personnel due to industry growth over the next 10 years is 127,000, but the supply of personnel is only about 5,000 annually. A policy shift and prompt implementation are needed to partially convert the oversupplied education budget in elementary, middle, and high schools into university financial support to nurture talent required for key industries such as semiconductors and displays."

Meanwhile, the emergency countermeasure meeting held that day was attended by 15 people, including representatives from the Korea Semiconductor Industry Association, Korea Display Industry Association, Korea Electronics and Telecommunications Industry Promotion Association, Korea Industrial Federation Forum, major semiconductor, display, and electronic information and communication manufacturing companies, and officials from the Ministry of Trade, Industry and Energy. The Korea International Trade Association plans to prepare policy alternatives for the difficulties raised at the meeting and propose them to related ministries such as the Ministry of Trade, Industry and Energy and the Ministry of Science and ICT.

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