S. Korea to spend $4.4 bn in chip, bio, future mobility next year

[Photo by Yonhap]

South Korea will spend over 5 trillion won ($4.4 billion) in chip, bio-health, and next-generation vehicle sectors next year in show of state backing to strengthen industrial leadership in the field.

In a meeting to spur growth of so-called “Big 3” industries on Thursday, Finance Minister Hong Nam-ki said that the government will provide all support to nurture semiconductor, future vehicles, and bio health industries and “establish and maintain future leading position.”

The government will increase spending to over 5 trillion won next year from 4.2 trillion won this year.

Hong noted how other countries are targeting the three industries as innovative growth sectors and offering support.

The United States, for example, ordered a review of supply chains for four key industries including batteries and semiconductor chips in February as a response to re-establish supply chain of global economy amid Covid-19 crisis, accelerate digital and green transformation, and take the lead in future industry sectors, Hong said.

Other major regions like the European Union and Japan are also seeking industry nurturing policies.

“The Big 3 industries we are trying to focus on nurturing overlap with strategic sectors of other countries,” Hong said. “We are putting out efforts to secure key technology of the Big 3 industries before others, support facility investment, and expand production and exports.”

Under tax code revision, the government will expand tax incentives of 1.16 trillion won for research and development and investment in the three sectors.

The minister also unveiled a plan to set up more than 500,000 standard electric vehicle chargers by 2025 to speed up popularization of environmentally-friendly cars across the country.

The government will build 12,000 fast-charging units near expressway resting areas, over 500,000 standard-charging units, and 2,300 units for commercial use near bus and taxi garages.

Korea will also build over 70 charging stations for hydrogen fuel vehicles in the second half of this year to establish total 180 units by the end of the year.

In the chip sector, the government will put out efforts to fully localize ultra pure water planning to achieve 60 percent of localization by 2025.

Ultra pure water is essential in chip production processing and Korea relies on foreign technology and parts for production technology.

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