[Reporter’s Notebook] Why Tax Credit Support for High Bandwidth Memory Is Significant

"I was surprised that tax credit benefits were given specifically for High Bandwidth Memory (HBM). Shouldn't this be seen as an indication that the government's understanding of the semiconductor industry has improved?"

A semiconductor industry insider recently met in private evaluated the government's amendment to the tax law enforcement decree this way. By explicitly specifying the recently spotlighted product 'HBM' as a national strategic technology eligible for R&D investment tax credits in advanced strategic industries, they expressed delight, calling it "an unprecedented move."

Through the amendment, the government decided to provide tax credits of 40-50% of related costs for small and medium-sized enterprises investing in HBM R&D, and 30-40% for mid-sized and large companies. The semiconductor industry regards the government's act of explicitly naming a specific product as a support target as a welcome development.

The industry's particularly positive evaluation of the HBM tax credit stems from the fact that, in the AI era, demand for next-generation memory like HBM is surging, and a groundbreaking support measure has emerged at this critical time. HBM is among memory products that require high technical difficulty and also have a relatively fast product release cycle by generation. SK Hynix has been recognized for overcoming deficits by focusing on the HBM business based on its technological capabilities. In a situation where companies are struggling, government investment benefits were desperately needed. Government support can provide the driving force for companies to advance when the conditions are favorable.

The government's stance has changed 180 degrees compared to just a year ago. In December 2022, during the process of finalizing the tax credit rate for semiconductor facility investments, the government proposed a lower credit rate than market expectations, drawing dissatisfaction from the industry. Despite multiple requests through various channels to expand the tax credit, the government did not budge. Only after the president himself mentioned strengthening semiconductor support did the credit rate get revised upward.

Government support for semiconductors worldwide is more akin to a war than competition. This is because it is seen as a matter of survival directly linked to national security. This is why the United States, Taiwan, Japan, and others have introduced groundbreaking support measures for semiconductor company investments. The HBM tax credit is also meaningful in that it hints at the government's possibility of 'pinpoint' support, meaning 'selection and concentration.'

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