South Korea to Provide $10 Billion Support to Chip Manufacturers Next Year

South Korea plans to increase its financial support for domestic chip manufacturers next year, aiming to bolster an industry that may face challenges from the new Trump administration's adverse policies and intensified competition from Chinese rivals.

The Ministry of Finance announced that the financial support, comprising loans, insurance, and guarantees from state-owned enterprises, will be set at 14.3 trillion won ($10.2 billion) next year as an increase from ongoing policy incentives.

The statement also indicated that the government plans to cover "a significant portion" of the 1.8 trillion won needed for underground electrical cables in chip production clusters south of Seoul.

In July, South Korea launched a 26 trillion won aid package, part of which will be reflected in next year's support amount. The government also announced on Wednesday that it would increase the tax credit rate for semiconductor-related firms by 10 percentage points and aim to establish a national "artificial intelligence computing center" valued at 4 trillion won by 2030.

As Donald Trump was elected, committing to support U.S. manufacturing and reduce dependence on foreign supply chains, South Korea is increasing its support for its most significant jewel in the economy. While continuing to provide financial assistance to chip manufacturers, Trump's election has added urgency to maintaining the sector's growth.