Korea Unveils $450 Billion Investment Plan to Become Chip Manufacturing Giant

The government of South Korea has announced an ambitious plan to improve the chip industry. It aims to persuade the country’s semiconductor manufacturers to invest 510 trillion won (370 billion euros) in expanding the chip industry by 2030 by offering generous incentives and tax breaks.

By 2030, the volume of Korea’s chip exports is forecast to double to $200 billion. Samsung Electronics, one of the world’s largest memory chip manufacturers, then announced that it would raise its investment in new chip plants by a quarter, to 120 billion euros. In April, competitor SK Hynix announced investments totaling 88 billion euros.

The Korean Ministry of Trade, Industry, and Energy will invest 1.1 billion euros in the production of “next-generation” power semiconductors and artificial intelligence (AI) applications as a first step. The government will also include 730 million euros in low-interest loans to help construct new chip plants.

Expansion of Tax Benefits

Furthermore, tax benefits would be expanded by six times. For example, the Korean government would provide tax breaks of up to 50% for investments in research and development, as well as ten to twenty percent for similar equipment in the future. Furthermore, the state and public power utility Kepco would split the cost of constructing power grids needed for the new chip plants by 50 percent.

The global chip shortage has been going on for some time already while it’s not expected to ease soon, which of course is not a good thing for servers that have to be deployed for the hosting of IT infrastructures but also for all kinds of other devices that make use of these chips. Hopefully, the Korean initiative will help boost the availability of chips on a global level.