South Korea to boost support for chip industry

The government in Seoul will release specific measures to support the semiconductor industry and improve the global competitiveness of domestic companies.

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South Korea’s finance minister, Choi Sang-mok, announced plans to introduce detailed tax incentives to increase the value of listed companies as part of ongoing corporate reforms. These measures, which are part of the ‘Value-up Programme’, will be refined after gathering feedback from market participants in June and July. The government aims to balance fairness and effectiveness in the proposed tax benefits, initially introduced in February, which were seen as insufficient by the market.

In addition to these corporate reforms, Choi emphasised continued government support for the vital semiconductor industry in South Korea. Next month, detailed measures will be released to bolster the industry’s global competitiveness, building on a recently announced support policy package.

Choi also addressed broader economic issues, highlighting support for a three-way free trade agreement (FTA) with Japan and China following a trilateral summit where leaders expressed their commitment to accelerating negotiations. On the domestic front, he projected consumer inflation to stabilise in the mid-to-lower 2% range in the latter half of the year. He anticipated higher tax revenue in 2024 despite currently weaker-than-expected corporate tax income.