South Korea wants to support its own industry in order to beat the chip industry in the USA. Cooperation with China and Japan is also on the agenda. South Korea wants to invest around seven billion euros in this and rely on tax breaks.
The USA has been investing billions of US dollars for a few years to lure large chip manufacturers to the USA or to convince them to build new production sites. In this way, the aim is to become more independent from the Asian market.
Why invest in the USA? During the Corona pandemic, many people noticed that hardly any computer chips were coming to the USA and Europe. As a result, prices rose dramatically, the PS5 was hardly available and graphics cards from AMD and Nvidia became unaffordable. This is exactly what these investments are intended to prevent or at least mitigate.
But in Asia, this is viewed with unease. Now South Korea has announced that it wants to invest a lot of money in its own industry and cooperate with two large neighboring countries. In doing so, it wants to beat the chip industry in the USA
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South Korea wants to cooperate more closely with Japan and China
A little over two weeks ago, we learned that the South Korean government had adopted a measure to combat the United States’ growth in the chip industry.
In total, the South Korean government wants to make the equivalent of seven billion euros available to local companies. Specifically, it is mainly about tax incentives: South Korea wants to continue to push forward the “Value Enhancement Programme” initiative in order to make its companies more valuable and thus have more resources for the production of chips and other cutting-edge technologies.
According to a report in Reuters magazine, South Korean Finance Minister Choi Sang-mok said that the main focus would be on tax breaks, aiming to achieve a balance between fairness and efficiency.
In this way, the main objective will be to increase the value of resident companies and, in turn, strengthen the aid packages for the semiconductor industry, making South Korea one of the most ambitious regions in terms of chip sector growth.
But Choi’s most exciting statement related to an agreement: South Korea is export-oriented and therefore supports a three-way free trade agreement with China and Japan. It is therefore to be expected that the countries will continue to grow closer together in the future in order to assert themselves against the USA.
Asia relies on in-house developments: For a few years now, Asian countries have been investing a lot of money in their own chip products and technologies. In China in particular, new products are being developed to make themselves less dependent on trade embargoes: A new processor could become an insider tip for gamers – it comes from neither AMD nor Intel