National efforts are being focused on fostering the semiconductor industry. With the government's vision for fostering system semiconductors unveiled alongside private investment, the industry is closely watching the passage of the revised semiconductor facility investment tax credit bill, known as the "K-Chips Act."

On the 16th, the Semiconductor Special Act on Expanding Tax Credits for Semiconductor Facility Investments passed the Tax Review Subcommittee of the National Assembly Planning and Finance Committee. The amendment includes raising the tax rate from 8% to 15% for large and medium-sized enterprises and from 16% to 25% for small and medium-sized enterprises.

This amendment, which passed the Tax Subcommittee, is expected to be submitted to the plenary session on the 30th after being deliberated by the full meeting of the Planning and Finance Committee and the Legislation and Judiciary Committee on the 22nd.

The main contents of the amendment are as follows: △Designating hydrogen and future mobility as national strategic technologies directly in the law along with semiconductors, secondary batteries, vaccines, and displays; △In order to strengthen the competitiveness of national strategic industries, the tax deduction rate for facility investment in national strategic industries will be expanded from the current 8% to 15% for large and medium-sized enterprises, and from the current 16% to 25% for small and medium-sized enterprises; and △Introducing a temporary investment tax deduction system that will increase the tax deduction rate by 2%p and 6%p for new growth, original technology, and general technology for 2023 only, and deduct 10% of all integrated investment increases, the Strategy and Finance Committee announced.

The industry is anxiously awaiting the passage of the government and National Assembly's semiconductor support policy. On the 8th, the semiconductor academic community sent a statement to the People Power Party, the Democratic Party of Korea, and the Justice Party, urging the National Assembly to quickly pass the ‘Semiconductor Industry Tax Credit Amendment Bill.’

This statement, issued by four semiconductor-related academic societies including the Korean Institute of Electrical Engineers, the Korean Microelectronics and Packaging Society, the Korean Society of Semiconductor and Display Technology, and the Semiconductor Engineering Society, emphasized the need to protect the semiconductor industry as a top priority asset in order to secure technological supremacy and economic security at a crossroads in the global competitive environment.

On the 15th, the Korea Semiconductor Industry Association also released a statement expressing its support for the announcement of the national advanced industry development strategy, saying, “We ask for the government’s continued interest and support so that our country’s semiconductor industry can go beyond its status as a memory semiconductor industry and be reborn as a true comprehensive semiconductor powerhouse,” and “We hope for the swift passage of the investment tax credit amendment currently being discussed in the National Assembly.”

At a time when the entire semiconductor industry is concentrating its efforts on new private investments to build semiconductor mega clusters, including those of Samsung Electronics and SK Hynix, companies are eagerly awaiting an expansion of the semiconductor investment tax reduction.

The Federation of Korean Industries released a statement welcoming the passage of the K-Chips Act through the Tax Subcommittee on the 16th, saying, “The domestic semiconductor industry is facing an unprecedented crisis, with exports recently halved and the gap between major companies such as Samsung Electronics and SK Hynix and Taiwan’s TSMC widening.” They added, “We expect this amendment to play a key role in relieving the industry of its breathing space and opening up new avenues.”

While relevant organizations eagerly await passage in the plenary session, voices from the industry are also rising, demanding regulatory reforms and the creation of conditions for human resource supply and demand that will allow domestic companies to actively invest, develop products, and create jobs.

one side Some voices opposed the expansion of the investment tax credit, claiming it favors large conglomerates. Justice Party lawmaker Jang Hye-young questioned the effectiveness of the tax benefits, claiming the amendment would only provide tax breaks for planned domestic investments.