SEOUL, April 15 (Reuters) – South Korea revealed an expanded support package for its crucial semiconductor industry on Tuesday, increasing the total to 33 trillion won ($23.25 billion), a 25% rise from the 26 trillion won package announced last year. The decision follows increasing pressure on the government to boost assistance as uncertainty grows under the current U.S. administration and competition from Chinese firms intensifies, according to a government statement.

A joint announcement from multiple ministries, including the trade ministry, stated that financial aid for the semiconductor sector would rise to 20 trillion won, up from the earlier 17 trillion won. This move is aimed at helping companies manage escalating costs and stay competitive in the global market. South Korea, the fourth-largest economy in Asia, is home to leading memory chip producers like Samsung Electronics and SK Hynix. However, the country has lagged in areas such as chip design and contract manufacturing.

In 2024, South Korea's semiconductor exports totaled $141.9 billion, making up 21% of its overall exports. Of this, $46.6 billion went to China and $10.7 billion to the United States. U.S. President Donald Trump announced on Sunday that new tariff rates on imported semiconductors would be disclosed in the coming week, though he noted there may be flexibility for certain companies.

Following the announcement, South Korean Finance Minister Choi Sang-mok said in a meeting that the government would engage in discussions with the U.S. regarding its Section 232 investigations into semiconductor and biopharma imports, aiming to limit negative effects on local businesses. This follows South Korea’s emergency relief measures introduced last week for its automobile sector, which has been heavily reliant on rising exports to the U.S. These measures include financial aid, tax breaks, and subsidies to boost domestic consumption, alongside diplomatic efforts to negotiate with the U.S. and expand international markets.

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