According to information Bloomberg, South Korean parliamentarians today, without undue delay, approved amendments to legal norms describing incentive methods for the development of clusters for the production of semiconductor products in the country. The tax benefits for participants in such activities have been increased in the new edition of the law.
If the US authorities are willing to provide cash grants for the development of the domestic semiconductor industry, the South Korean authorities prefer to stimulate private investors’ capital allocation through tax deductions. In particular, large chip manufacturers who are willing to expand their capacities in South Korea will receive an increased tax deduction from 8% to 15% under the new law, and small and medium-sized companies can count on a full 25% instead of the previous 16%.
179 members of South Korea’s parliament voted in favor of passing the new law, with only 13 people opposed. Almost forty MPs abstained and 70 did not vote. Therefore, the amendments were adopted at first reading. The country’s president expressed his willingness to support the adoption of these legislative changes. Recall that in mid-March the South Korean authorities proposed allocating $422 billion to develop the nation’s semiconductor industry over the next twenty years, with the bulk of the investment expected from big companies like Samsung Electronics and SK Hynix. The first will receive $229 billion of that amount, the company will build at least five new companies by 2042, including custom chip manufacturing facilities for third-party customers.