South Korea’s Special Chips Act reduces capital formation and infrastructure uncertainty for the country’s semiconductor sector but leaves execution risk unresolved, formalizing a split between state-backed industrial support and firm-level operational constraints.

The Special Act on Strengthening and Supporting the Competitiveness of the Semiconductor Industry cleared the National Assembly on Jan. 29 after lawmakers removed a proposed exemption allowing semiconductor R&D personnel to exceed the 52-hour workweek, one of the most politically contentious elements of the bill.

The provision was stripped from the main text and relegated to a supplementary opinion for further discussion.

The law, therefore, consolidates infrastructure, fiscal