Money Pours into AI, Trade, and Renewable Energy... Industry Ministry's Budget Up 21% to Record High Next Year

Trade and Export Response Up 67.8%
New Support Measures for Companies Hit by Tariffs
Focused Investments in “AX Transformation,” Supply Chain Stability,
and the “Five Axes, Three Special Zones” Balanced Growth Strategy

The Ministry of Trade, Industry and Energy has set its budget for next year at 13.8778 trillion won, a 21.4% increase from this year's main budget. This is the largest budget in history. In particular, double-digit increases have been allocated to the AI Industry Transformation (AX), responses to global protectionism, and the transition to renewable energy, clearly reflecting the government's policy priorities.

The most notable aspect of next year's budget is the AI transformation across the entire industrial sector. According to the ministry on September 1, the budget for this area will be expanded from 565.1 billion won this year to 1.1347 trillion won next year, a dramatic increase of 100.8%. The government aims to integrate AI into manufacturing sites to establish more than 500 autonomous manufacturing plants by 2030, and will focus large-scale investments on commercializing next-generation technologies such as humanoid robots and on-device AI semiconductors.

Funding for trade and export responses will also increase by 67.8%, from 1.034 trillion won this year to 1.7353 trillion won next year. To address high tariffs imposed by the United States and the spread of global protectionism, the government will significantly increase its contribution to the trade insurance fund to 600.5 billion won. It has also introduced new emergency vouchers (42.4 billion won) and secondary compensation programs to support companies affected by tariffs.

The budget for the energy transition centered on renewable energy will rise by 41.6%, from 897.3 billion won to 1.2703 trillion won. The budget for financial support for new and renewable energy will more than double to 648 billion won, and investments will be concentrated in building next-generation power grids, including HVDC (high-voltage direct current) technology development and AI-based distributed power networks (119.6 billion won). New funding has also been allocated for the localization of small modular reactor (SMR) technology.

Additionally, budgets for fostering advanced industries (1.6458 trillion won, up 26.4%), stabilizing supply chains (1.9993 trillion won, up 11.8%), and balanced regional growth (883.5 billion won, up 16.8%) have all been expanded. Key projects include the establishment of semiconductor mini-fab infrastructure (115.7 billion won), the Korea-US shipbuilding industry cooperation center (6.6 billion won), and support for RE100 industrial complexes (26.1 billion won). In particular, in line with the “5 Regions, 3 Special Zones” balanced growth strategy, the government has increased subsidies for regional investment promotion and budgets for improving industrial complex environments, while strengthening region-led growth foundations through local innovation clusters and mega-city cooperation projects.

An official from the ministry stated, "We reduced habitual and overlapping expenditures and redirected the secured resources toward securing new growth engines," adding, "Next year's budget proposal will be submitted to the National Assembly on September 3 and finalized after review."

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