• South Korea raises semiconductor support package to $23.2 billion amid U.S. tariff threats.
• The government plans to assist local chip companies facing rising global competition.
• Exports of semiconductors account for 21% of the country's total exports.
• U.S. tariffs on imports pose significant risks to South Korean industries.
• Additional funding to enhance domestic chip manufacturing infrastructure.

On April 15, South Korea announced a significant increase to its semiconductor support package, raising it to 33 trillion won ($23.2 billion), up from 26 trillion won last year. This decision aims to bolster the critical semiconductor sector amid growing U.S. tariff uncertainties and intensifying competition from Chinese firms, according to a statement from the government.

The increase reflects a broader strategy by the South Korean government to provide financial backing to its semiconductor industry, which is central to the national economy. The financial aid program is pronouncedly set to enhance assistance to 20 trillion won, signifying an escalation from the previous 17 trillion won. The government's commitment emphasizes its intent to help local companies manage escalating costs in the competitive global market, according to Reuters.

In 2024, semiconductors represented 21% of South Korea's total exports, accounting for approximately $141.9 billion. Notable shipments included $46.6 billion to China and $10.7 billion to the United States, underscoring the critical nature of these markets. However, increasing tariffs from the U.S. loom over South Korea's prospects, with recent comments from President Donald Trump suggesting he will announce tariffs on imported semiconductors in the upcoming week, according to South China Morning Post.

In response to escalating trade tensions, South Korean Finance Minister Choi Sang-mok articulated the need for proactive engagement with the U.S. government to mitigate the tariff impacts. He highlighted ongoing efforts to address Section 232 investigations into semiconductor imports, indicating a focus on minimizing adverse effects on local firms. This engagement reflects the broader economic strategy to sustain the competitiveness of South Korean industries in light of U.S. policy changes, as noted in the report by Channel News Asia.

Recent announcements also show that South Korea's government is committed to investing heavily in its semiconductor infrastructure, including developing underground transmission lines at chip manufacturing sites. This infrastructure investment is perceived as crucial for maintaining the country’s competitive edge in semiconductor innovation and manufacturing, reinforcing the government's support strategy amid complex global trade dynamics.