South Korea to Boost Support for Domestic Semiconductor Industry Amid Trump's Tariff Threats

Amid the backdrop of Trump's tariff threats, the South Korean government announced on Tuesday that it will expand its support plan for the country's semiconductor industry to 33 trillion won (approximately 1.69492 trillion yuan), an increase of about one-quarter compared to the 26 trillion won (approximately 1.33539 trillion yuan) announced last year.

In its statement, the South Korean government called for expanded support for domestic companies, citing increasing uncertainty in US government policies and intensifying competition from Chinese rivals.

According to a joint statement from multiple departments, including the Ministry of Trade, the South Korean government will also increase its financial aid plan for the chip industry from the previous 17 trillion won (approximately 873.14 billion yuan) to 20 trillion won (approximately 1.02723 trillion yuan).

The report stated that South Korea's decision to inject more funds into its critical chip industry aims to help companies cope with rising costs in global competition.

As the fourth-largest economy in Asia, South Korea is home to global top memory chip manufacturers Samsung Electronics and SK Hynix—though these giants have fallen behind some competitors in areas such as chip design and tolling business.

The semiconductor industry can be considered the lifeblood of South Korea's economy. Government data shows that in 2024, South Korea's semiconductor export value reached $141.9 billion, accounting for 21% of the country's total exports.

Last year, South Korea's exports to China and the US were $46.6 billion and $10.7 billion, respectively.

On Sunday, April 13, US President Trump stated that he would announce the tariff rates for imported semiconductors and indicated that he would take flexible measures for some companies in the semiconductor industry.

Last week, South Korea announced emergency support measures for its automotive industry, seeking to mitigate the impact of US tariffs on the sector. For years, South Korea's car exports to the US have been increasing sharply.

These measures include financial support for the automotive industry, as well as tax cuts and subsidies to boost domestic demand, while the government also pledged to negotiate with the US and help expand the market.