South Korea unveils $23 billion support package for chips amid US tariff uncertainty

On Tuesday, South Korea revealed an expansion of its support program for the essential semiconductor sector to 33 trillion won ($23.25 billion), which marks an approximately 25% increase from last year’s 26 trillion won initiative.

The actions were prompted by demands for the government to enhance assistance amid increasing policy unpredictability under the existing U.S. administration and escalating competition from Chinese competitors, the government stated in a release.

Seoul will increase its financial aid program for the chip industry to 20 trillion won, up from the earlier 17 trillion won, as stated in a joint announcement from several ministries, including the trade ministry.

South Korea’s choice to invest additional funds into its vital chip industry aims to assist firms in managing increased expenses while competing on a global scale, it stated.

Asia’s fourth-biggest economy hosts the leading memory chip manufacturers, Samsung Electronics , opens new tab and SK Hynix , opens new tab, but they have lagged behind certain competitors in fields like chip design and contract chip production.

In 2024, South Korea’s semiconductor exports reached $141.9 billion, representing 21% of the nation’s total, according to government statistics. Exports to China and the United States reached $46.6 billion and $10.7 billion, respectively.

On Sunday, U.S. President Donald Trump mentioned that he would reveal the tariff rate for imported semiconductors within the week, noting that there could be some flexibility for certain companies in the industry.