According to reports from the Financial Associated Press on November 27 (editor Huang Junzhi), South Korea plans to increase financial support for domestic semiconductor manufacturers next year to help the industry cope with the adverse policies that may arise from 'Trump 2.0' and the more intense challenges from competitors such as China.

The South Korean Ministry of Finance stated on Wednesday that driven by continuous stimulus policies, low-interest loans provided by government-affiliated institutions, along with insurance and guarantees, will reach 14.3 trillion won (equivalent to 10.2 billion USD) next year.

It is reported that these loans will be provided through state-owned banks, which include 1.8 trillion won for installing transmission lines to support businesses in new semiconductor parks. South Korea is building the largest high-tech semiconductor manufacturing cluster in the global market to attract relevant companies.

In addition, the South Korean government stated in a statement that it plans to bear a 'significant part' of the 1.8 trillion won needed for underground cable installation in the semiconductor manufacturing cluster south of Seoul.

South Korea initiated a 26 trillion won aid program in July this year, part of which will be reflected in next year's aid amount. In addition, the South Korean government also plans to increase the tax credit rate for semiconductor-related enterprises by 10 percentage points by 2030 and build a national ai computing center with a scale of 4 trillion won.

Impact of 'Trump 2.0'.

As Donald Trump was elected president and vowed to support American manufacturing and reduce dependence on foreign supply chains, South Korea is intensifying its support for its economy, the 'imperium crown'. Although the South Korean government has never stopped providing financial support to semiconductor manufacturers, Trump's election increased the urgency of protecting the growth of this industry.

The South Korean Ministry of Defense stated in a statement that economic uncertainty may increase after the inauguration of the new government in the USA, although the defense and shipbuilding relationship between the USA and South Korea may still benefit.

Notably, South Korea's largest company, Samsung Electronics, is utilizing the subsidies promised by the Biden administration's Chips Act to build a semiconductor factory in Texas. The Trump camp frequently criticized this funding plan during the campaign.

Fierce competition.

The South Korean Ministry of Finance stated that competitors like China may accelerate their 'catch-up' with South Korea's supply chain, thereby increasing the necessity for South Korea to assist in enhancing its technology industry's competitiveness. The report indicated that the rising wave of protectionist policies may also weaken South Korea's trade-dependent economy.

Data shows that technology exports account for about one-third of South Korea's total exports. Compared to 2023, South Korea's economy is expected to grow by at least 2% this year, especially against the backdrop of strong demand for semiconductors, including memory chips used for AI development.

After a slowdown in export growth in recent months, economists have become less optimistic about next year's forecasts. South Korean officials are also concerned that Trump may adopt a tougher stance toward American trade partners after taking office in January.