S. Korea govt plans $4.9 bn more help for semiconductors as US tariff risk bites

South Korea on Tuesday announced plans to invest an additional $4.9 billion in the country’s semiconductor industry, citing “growing uncertainty” over US tariffs.

“An aggressive fiscal investment plan has been devised to help local firms navigate mounting challenges in the global semiconductor race,” the finance ministry said in a press release, adding the country’s chip support package would be increased by $4.9 billion.

South Korea is a major exporter to the United States and its powerhouse semiconductor and auto industries would suffer greatly under President Donald Trump’s looming 25 percent tariffs.

South Korea is home to the world’s largest memory chip maker Samsung, and largest memory chip supplier SK Hynix.

South Korea’s finance ministry said “growing uncertainty” following rounds of US tariff threats had left the powerful industry clamouring for government support.

“To foster a dynamic, private sector-led ecosystem for semiconductor innovation and growth, the government will increase its investment in the sector from 26 trillion won ($18.2 billion) to 33 trillion won ($23.1 billion),” said the ministry.

On his so-called April 2 “Liberation Day,” Trump announced a slew of tariffs on trading partners across the world, including a 25-percent hit on South Korean goods, before backtracking and suspending their implementation for 90 days.

Even so, “duties targeting specific sectors such as semiconductors and pharmaceuticals, remain on the horizon,” finance minister Choi Sang-mok said during a meeting.

“This grace period offers a crucial window to strengthen the competitiveness of South Korean companies amid intensifying global trade tensions,” he added.

“The government plans to expand support for the semiconductor industry, allocating 33 trillion won ($23.1 billion), with over 4 trillion won in fiscal spending set to be injected through 2026,” he said.

The package includes funding for infrastucture development, including underground transmission lines at semiconductor clusters which are currently being built.

“The government will boldly support investment by semiconductor companies,” said Choi. He added that the package includes securing talent for the industry.

The investment is part of a large revised supplementary budget proposal of 12 trillion won ($8.4 billion), and is required to be passed by the National Assembly.