Power grid expansion is chip industry’s priority

[Photo by Lee Seung-hwan]

South Korean President Yoon Suk Yeol announced a national initiative to bolster the semiconductor industry during a government meeting on Thursday. The plan, worth 26 trillion won ($19 billion), includes 17 trillion won in low-rate loans, 2.5 trillion won in infrastructure support, and 5 trillion won dedicated to research and development and human resource training.

Compared to the substantial aid extended by other developed economies, Korea‘s subsidies package may seem modest. The United States, for instance, is offering $11 trillion in subsidies and $15 trillion in loans to Intel Corp., while Japan has earmarked $10 trillion in subsidies for Taiwan Semiconductor Manufacturing Co. (TSMC). Korea’s heavy reliance on loans within its package poses financial strains on companies.

In tandem with raising support levels, more attention should also be directed towards bolstering the nation‘s power grid, particularly in burgeoning semiconductor hubs such as the Yongin National Industrial Complex.

Efficient operation of chip manufacturing facilities is dependent on a robust power supply, which requires a nationwide network of transmission lines. Regrettably, some power cable projects are being delayed due to local opposition and licensing hurdles, threatening to impede progress in vital infrastructure development.

Given the pivotal role of the semiconductor industry in Korea’s economic future, concerted efforts from both the government and the National Assembly are imperative. Speeding up grid expansion and increasing financial support are not optional if we want to enhance chip production.