According to reports on November 27 by Caixin, South Korea plans to increase financial support for domestic semiconductor manufacturers next year to help the industry cope with the adverse policies potentially brought by "Trump 2.0," as well as the intensified competition from rivals like China.

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

It is reported that these loans will be provided through state-owned banks, including 1.8 trillion won for the installation of transmission lines to support companies in the new semiconductor park. South Korea is building the world's largest high-tech semiconductor manufacturing cluster to attract related enterprises.

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

South Korea launched a 26 trillion won aid plan in July this year, with a part of it reflecting in next year's aid amount. Moreover, the South Korean government also plans to increase the tax credit rate for semiconductor-related companies by 10 percentage points by 2030 and build a national "AI computing center" with a scale of 4 trillion won.

"Trump 2.0" Impact.

As soon as Donald Trump was elected president, promising support for usa manufacturing and reducing dependence on foreign supply chains, South Korea intensified its support for its economic "imperium crown." Although the South Korean government has never stopped providing financial support to semiconductor manufacturers, Trump's election increased the urgency to protect the growth of this industry.

The South Korean Ministry of Defense stated in a statement that after the new usa government takes office, economic uncertainty may increase, although the usa-south korea relationship in defense and shipbuilding 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 criticized this funding plan multiple times during the campaign.

Fierce competition.

The South Korean Ministry of Finance stated that competitors like china may also accelerate their "catch-up" with the south korean supply chain, thereby increasing the necessity for south korea to enhance the competitiveness of its technology industry. The report indicated that the rising tide of protectionist policies could 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 in light of strong demand for semiconductors, including storage chips used for ai development.

After a slowdown in export growth in recent months, economists have become less optimistic about projections for next year. South korean officials are also concerned that after Trump takes office in January, he may adopt a tougher stance towards usa's trade partners.