The Korea Semiconductor Industry Association (KSIA) has asked the South Korean government to enact new laws that provide support for the industry.
The association said in an open letter that the US was planning to offer up to 40% tax reduction for semiconductor equipment spending, while the European Union was planning a 67 trillion won project to promote local semiconductor production.
South Korea needed an equivalent to these incentives, KSIA said, to keep up with the competition.
As of 2020, the country’s semiconductor had 18.4% market share and was second to the US, KSIA said. In memory semiconductors, South Korea had a 56.9% market share and was the world leader.
Semiconductor export accounted for 19.4% of South Korea’s total, the association said. Equipment spending in chips locally accounted for over 40% of the total done
in the manufacturing sector, it added.
The industry was the pillar of the country’s economy, but is facing multiple challenges ahead, KSIA said.
South Korea should therefore offer up to 50% tax reduction in related research, development and equipment spending, the organization said.
Companies should also get support in approval to build new facilities, water supply and other infrastructures, it said.
Universities in Seoul should open more majors related to semiconductors to recruit local talents, KSIA said.