South Korea will pass the Korean version of the chip law earlier, and strategic industries such as chips will receive more favorable tax policies.

(Reuters)

[Financial Channel/Comprehensive Report] In order to promote the development of the semiconductor industry and encourage corporate investment, the South Korean Assembly passed the "K-Chips" bill on the evening of Thursday (30th), which is the Korean version of the chip law, providing strategic industries such as chip manufacturers and electric vehicles. Provide more favorable tax policies.

According to comprehensive Korean media reports, according to this bill, the tax credit rate for large chip manufacturers will be increased from 8% to 15%; the tax credit rate for small chip companies will also be increased from 16% to 25%. An additional 10% tax deduction is available for any additional investment.

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South Korea’s exports are heavily dependent on the semiconductor industry. The revenue of Samsung’s companies accounts for about 20% of the country’s GDP. However, due to inventory adjustments and the decline in market demand for memory, South Korea’s chip exports in the first 20 days of March this year were larger than the same period last year. minus 44.7%.

At the same time, the U.S.-China technology war has also had a considerable impact on South Korea’s semiconductor industry. As Biden actively wins over allies to counter China, South Korea, which has long relied on the Chinese market, will be in a more difficult situation. Although Samsung and SK Hynix (SK Hynix) has previously been allowed by the United States to maintain normal production activities in China for one year, but recently it has been reported that SK Hynix will seek an extension of the exemption again.

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