The government is set to increase tax breaks to 6% from the current 3% or lower for capital expenditures between the second half of 2021 to 2024 for large corporations conducting "key strategic technology" including semiconductors, according to a government statement.
According to the Korea Semiconductor Industry Association over 150 chip companies, including including Samsung Electronics and SK Hynix, have plans to invest a combined $440bn between this year and 2030.
"As semiconductor competition intensifies around the world, it is clear that we also need to increase our competitiveness in the semiconductor industry," South Korean President Moon Jae-in.
The government said that it is also looking to offer long-term loans for increasing 8-inch wafer chip contract manufacturing capacity and investment for materials and packaging.
SK Hynix is said to be considering acquiring additional 8-inch chip contract manufacturing capacity, while Samsung has begun site preparation for a third chip plant in Pyeongtaek, south of Seoul, which is expected to be completed in 2022.
South Korean joins a number of countries who are looking to bolster local chip supply chains because of the severe chip shortages that are affecting production in a number of key industries.
