South Korea aims to support its own industry to surpass the chip industry in the USA. Collaboration with China and Japan is also on the agenda. South Korea plans to invest around seven billion euros and rely on tax incentives.
The USA has been investing billions of US dollars for a few years to attract major chip manufacturers to the USA or encourage the construction of new product sites. In this way, they aim to become less dependent on the Asian market.
Why invest in the USA? During the Corona pandemic, many noticed that hardly any computer chips were arriving in the USA and Europe. This led to extreme price increases; the PS5 was hardly available and graphics cards from AMD and Nvidia became unaffordable. This is precisely what these investments aim to prevent or at least mitigate.
However, in Asia, this is viewed with concern. South Korea has now stated that it will invest heavily in its own industry and cooperate with two major neighboring countries. With this, it aims to surpass the chip industry in the USA.
South Korea Wants to Collaborate More with Japan and China
Just over two weeks ago, we learned that the South Korean government has decided on a measure to combat the growth of the United States in the chip industry.
Overall, the South Korean government plans to make the equivalent of seven billion euros available to local companies. Specifically, it mainly concerns tax incentives: South Korea wants to further advance the “Value Enhancement Programme” to make its companies more valuable and thus have more resources for the production of chips and other high-tech products.
According to a report by the magazine Reuters, South Korean Finance Minister Choi Sang-mok stated that they mainly want to focus on tax incentives: they aim to strike a balance between fairness and efficiency.
In this way, the main goal will be to increase the value of resident companies and, in return, strengthen aid packages for the semiconductor industry. South Korea will thus become one of the most ambitious regions in terms of chip sector growth.
However, the most interesting statement from Choi was about an agreement: South Korea is export-oriented and therefore advocates a trilateral free trade agreement with China and Japan. It is therefore expected that the countries will grow closer together in the future to compete against the USA.
Asia is focusing on in-house developments: For a few years now, Asian countries have been investing a lot of money in their own chip products and technologies. In particular, China is developing new products to become less dependent on trade embargoes: A new processor could become a secret tip for gamers – it’s from neither AMD nor Intel
