S. Korea to offer tax benefit, subsidy to chipmakers for 450 bln USD investment by 2030

Source: Xinhua| 2021-05-13 16:32:04|Editor: huaxia

SEOUL, May 13 (Xinhua) -- The South Korean government said Thursday that it will offer tax benefits and subsidies to local chipmakers to encourage them to invest a total of 510 trillion won (450 billion U.S. dollars) in research and development (R&D) and facilities by 2030.

The government planned to create a "K-semiconductor belt" to build supply chains in the southern region of Gyeonggi province and the northern area of Chungcheong province, according to the Ministry of Trade, Industry and Energy.

Inside the belt, a new "fabless valley" will be established to let fabless firms do business in Pangyo, south of Seoul.

New facilities will be built for chip manufacturing, materials, components, equipment and packaging, and additional investment will be made in existing facilities under government assistance.

Domestic chipmakers, including Samsung Electronics and SK hynix, planned to invest 41.8 trillion won (37 billion U.S. dollars) in 2021, increasing the combined investment to 510 trillion won (450 billion U.S. dollars) by 2030.

The government will provide tax credits of up to 50 percent for investment in R&D, and up to 20 percent for facility investment.

It will also grant low-rate loans to chipmakers for facility investment, while helping foster high-quality manpower in the semiconductor industry.

If the investment plan is implemented as scheduled, the country's chip export may expand to 200 billion U.S. dollars in 2030 from 99.2 billion dollars tallied in 2020, according to the government estimate. Enditem