Seoul: The government will "swiftly" devise support measures for the local chip industry to cushion the impact of the United States' planned tariffs on semiconductor imports, the industry minister said Thursday. Industry Minister Ahn Duk-geun revealed that government measures will be announced soon during a meeting with officials from local chip manufacturers to discuss a response strategy against the proposed U.S. tariffs.
According to Yonhap News Agency, U.S. President Donald Trump has warned of tariffs on semiconductor imports since taking office in January and reaffirmed the plan last week, indicating they will commence "very soon." During Thursday's meeting, semiconductor industry officials urged the government to actively negotiate with the U.S. and formulate support measures to mitigate the tariffs' impact on local businesses, as stated by the Ministry of Trade, Industry and Energy.
Business officials noted that the proposed tariffs might have a limited impact on the local chip industry due to the U.S.'s limited production capacity and South Korea's significant global market share, particularly in high-value products like high bandwidth memory. However, they expressed serious concerns over increasing uncertainties in the global trade market that could negatively affect the local industry and economy, according to the ministry.
The ministry indicated that potential support measures for the chip industry could include tariff response vouchers and efforts to alleviate cost burdens from materials and components heavily reliant on imports. The government is also considering expanding the domestic use of Korean-made chips for the national artificial intelligence (AI) computing center and assisting Korean companies in exporting their chips to AI data centers in the Middle East and Southeast Asia.
To encourage corporate investment in the semiconductor sector, the government is contemplating stronger incentives, such as additional financial support for the semiconductor cluster in Yongin, just south of Seoul, and regulatory streamlining. Additionally, efforts will be made to enhance the semiconductor ecosystem's overall competitiveness, including constructing fabrication plants for advanced chips and launching large-scale research and development (R and D) projects.
The government plans to invest 1 trillion won (US$674.3 million) in developing on-device AI chips for use in the automotive, robotics, defense, and Internet of Things (IoT) industries. "The private and public sectors must work together to address the trade and supply chain risks we currently face," Ahn said. He emphasized that the government will continue negotiations with the U.S. through various channels and swiftly implement support measures for the semiconductor industry by mobilizing the nation's full capabilities, as the tariff war is also a battle for attracting corporate investment.