As global semiconductor supremacy intensifies, investment competition among companies is becoming extremely fierce. Samsung Electronics is expected to announce additional investment locally after rivals Intel and Taiwan’s TSMC receive large subsidies from the US government.
In comparison, domestic semiconductor investment in South Korea is relatively restrained. Industry comparisons highlight Japan’s TSMC Kumamoto factory, which was completed in just one and a half years, and South Korea’s Yongin semiconductor cluster, which has not even been operating properly for more than three years. In response to this, some argue that the South Korean government should take more direct and proactive support measures.
However, the 22nd National Assembly election ended in victory for the opposition party, and there are concerns that the competitiveness of the semiconductor industry will decline. During the April 10 election, both political parties promised to extend the K-chip law (an amendment to the Tax Benefit Restriction Law), but their opinions differed on direct subsidy support.
April 14th: According to overseas media and industry sources, Samsung Electronics plans to open an additional semiconductor factory in the United States as early as April 15th (local time) in line with the announcement of subsidies from the US government this week. He plans to make an announcement.
Samsung Electronics is currently building a $17 billion foundry in Taylor, Texas. The Wall Street Journal and Reuters report that the company plans to announce additional investments in another semiconductor factory and a state-of-the-art packaging research and development center. Once announced, Samsung’s total investment in the United States is expected to reach $44 billion.
Samsung Electronics’ latest investment plan is reportedly influenced by astronomical subsidies from the US government. Prior to this, the US government had decided to support TSMC with $11.6 billion, more than double the expected $5 billion.
In response, TSMC plans to increase its investment amount from the planned $40 billion to $65 billion and build a third factory in Arizona by 2030. Samsung Electronics is also expected to follow a similar policy.
It is known that the US government has provided more than $6 billion in subsidies to Samsung Electronics, and the subsidy to investment ratio is approximately 13.6%, similar to TSMC’s 10.1%.
Competition among US semiconductor companies is expected to further intensify. Taiwanese media reported that TSMC has secured 1,100 acres (approximately 4,452 square kilometers) of construction land in Phoenix, Arizona, indicating the possibility of increasing the number of local semiconductor production facilities from three to six locations. . The expansion is seen as an attempt to cater to local demand from big tech companies such as Nvidia and Apple, given geopolitical risks.
Another South Korean semiconductor company, SK Hynix, also hopes to benefit from subsidies under the U.S. Semiconductor Act. SK Hynix plans to invest $3.87 billion to build an advanced AI memory packaging production base in Indiana, US
As the global power struggle over cutting-edge industries intensifies, all eyes are on the next Diet session. South Korea’s government is seen as lagging far behind its competitors in supporting the semiconductor industry, a trend reinforced by recent pledges made by all political parties in the April 10 general election.
Industry leaders, including Samsung Electronics DS Division President Kyung Kye-hyun and SK Hynix President Kwak No-joon, emphasized the need for various support measures, including subsidies, which were proposed in a meeting with the Minister of Trade, Industry and Energy. , Energy, Ahn Deok Geun last February.
However, the Democratic Party, which won a decisive victory in the recent general election, did not include direct subsidy support in its semiconductor pledge. Discussion of measures to support the semiconductor industry, including the revision of the K-chip law, is expected to be difficult due to the difference in the positions of the government and opposition parties. The K-chips law was initially opposed by the Democratic Party, citing it as “favoring chaebols” and “tax cuts for the wealthy,” but its passage at the plenary session was delayed.
National Assemblyman Kim Hak-young of the People’s Power Party proposed extending the deadline for abolishing the K-chip law until 2030 in a bill to revise the Tax Benefit Restriction Act in January of this year, but there has not yet been sufficient discussion. The bill has not yet been debated. Committee. Since the term of the 21st National Diet ends on May 29 next month, it seems unlikely that the bill will be passed in the current session.
The K-chip law allows semiconductor companies to deduct up to 15% from their taxes on capital investments, and up to 25% for small and medium-sized enterprises. If the K-chip law expires at the end of this year as planned, the tax deduction rate for semiconductor investments by large companies will drop from 15% to 8%.
