South Korea passes K-Chips Act but semiconductor policy still in limbo



Analysis South Korea passes K-Chips Act but semiconductor policy still in limbo New tax incentives provide relief, but labor and regulatory hurdles create long-term uncertainty for chipmakers John LeeFebruary 18, 2025 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON An illustration of semiconductors \| Image: Korea Pro South Korea’s semiconductor policy took a step forward with the passage of the K-Chips Act Tuesday in the National Assembly’s Strategy and Finance Committee, advancing critical tax incentives and R&D support for the industry. However, the broader Semiconductor Special Act, which included a contentious exemption to the 52-hour workweek rule for semiconductor workers, remains stalled. This mixed outcome highlights the persistent challenges in South Korea’s industrial policy and the difficulty in separating economic strategy from political conflict. While the passage of new tax incentives will provide short-term relief, lingering regulatory uncertainties could still undermine long-term competitiveness. TAX INCENTIVES ADVANCE © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01South Korea’s missile defense push raises new questions over wartime stocks 02South Korea bank hacks expose weak links beyond core financial systems 03Lee-Zelensky feud exposes South Korea’s widening Ukraine policy dilemma 04Lee Jae Myung’s ‘pacemaker’ strategy tests South Korea’s leverage with Trump 05Trump’s Korea investment victory lap masks safeguards Seoul still controls 06North Korean POW dispute tests Seoul-Kyiv trust and future Ukraine policy 07South Korea’s CPTPP push exposes the cost of turning trade gains into consensus 08AI storage boom gives South Korea battery makers an EV overcapacity lifeline

Analysis

South Korea passes K-Chips Act but semiconductor policy still in limbo

New tax incentives provide relief, but labor and regulatory hurdles create long-term uncertainty for chipmakers

John LeeFebruary 18, 2025

South Korea passes K-Chips Act but semiconductor policy still in limbo

An illustration of semiconductors | Image: Korea Pro

South Korea’s semiconductor policy took a step forward with the passage of the K-Chips Act Tuesday in the National Assembly’s Strategy and Finance Committee, advancing critical tax incentives and R&D support for the industry. However, the broader Semiconductor Special Act, which included a contentious exemption to the 52-hour workweek rule for semiconductor workers, remains stalled.

This mixed outcome highlights the persistent challenges in South Korea’s industrial policy and the difficulty in separating economic strategy from political conflict. While the passage of new tax incentives will provide short-term relief, lingering regulatory uncertainties could still undermine long-term competitiveness.

TAX INCENTIVES ADVANCE

South Korea passes K-Chips Act but semiconductor policy still in limbo

LATEST ANALYSIS

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John Lee