South Korea Pledges Nearly $5 Billion Boost for Semiconductor Industry Amid US Tariff Fears

In a bold move to safeguard its critical tech sector, South Korea has announced plans to inject an additional 4.9 billion dollars into its semiconductor industry by 2026.

This fresh round of investment comes in response to mounting global trade tensions, particularly the looming threat of new U.S. tariffs that could severely impact South Korea’s economy.

The country’s Ministry of Finance cited “growing uncertainty” surrounding the U.S.’s protectionist stance, particularly the 25% tariffs floated by President Donald Trump on South Korean exports. While these sweeping levies were announced on April 2—dubbed “Liberation Day”—they were later paused for 90 days. However, the temporary suspension has done little to ease concerns.

South Korea is a major supplier of semiconductors to the U.S., with tech giants like Samsung and SK Hynix at the heart of this global supply chain. The mere possibility of sector-specific tariffs, especially on semiconductors and pharmaceuticals, has already spooked markets and sent shockwaves through Seoul’s stock exchange.

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Finance Minister Choi Sang-mok acknowledged the gravity of the situation during a recent high-level meeting. “This grace period offers a crucial window to strengthen the competitiveness of South Korean companies amid intensifying global trade tensions,” he said.

To meet this challenge head-on, the government has revised its broader supplementary budget to include a record 12 trillion won ($8.4 billion), with a significant portion allocated to bolstering the semiconductor sector. The total investment in the chip industry will now rise from 26 trillion won ($18.2 billion) to 33 trillion won ($23.1 billion).

This stimulus package isn’t just about throwing money at the problem—it’s a strategic plan aimed at long-term resilience. It includes funding for essential infrastructure like underground transmission lines in major semiconductor clusters, as well as programs to develop talent and strengthen the ecosystem for innovation.

“The government will boldly support investment by semiconductor companies,” said Minister Choi, underscoring the urgency of the situation. “We’re committed to fostering a dynamic, private sector-led environment for semiconductor growth.”

As the global chip race intensifies and geopolitical risks grow more unpredictable, South Korea’s decisive action could prove crucial. This isn’t just about shielding a single industry—it’s about securing the backbone of the nation’s economy.