In the fast-paced world of finance, the semiconductor industry plays a critical role, especially in countries like South Korea, where chips make up a significant portion of total exports. With the potential risks looming from measures threatened by incoming U.S. President Donald Trump, South Korea’s ruling party has proposed a special chips act to support chipmakers in the country.
The proposed act includes subsidies and an exemption from the national cap on working hours for chipmakers, aiming to safeguard the industry against challenges posed by competitors in countries like China, Taiwan, and the United States. With tariffs and trade wars on the horizon, Korean companies like Samsung Electronics are gearing up for increased competition and potential price pressures from rivals.
Lawmaker Lee Chul-gyu, one of the sponsors of the bill, emphasized the importance of supporting Korean companies in the face of global semiconductor trade tensions. The bill aims to give Korean chipmakers a competitive edge by allowing employees involved in research and development to work longer hours, bypassing the existing labour law restrictions.
While the proposal has garnered support from some quarters, such as sponsors of the bill, it has faced opposition from Samsung’s labour union, citing management failures as the root cause of the industry challenges. With companies like TSMC and SK Hynix edging ahead in tapping into the growing demand for artificial intelligence chips, Korean companies are under pressure to innovate and stay ahead of the curve.
In the midst of this competitive landscape, South Korea’s semiconductor industry is at a crossroads, balancing the need for government support and regulatory flexibility with the demands of a rapidly evolving market. As the industry faces uncertainties from global trade dynamics and geopolitical tensions, the proposed chips act could provide a much-needed boost to Korean chipmakers, enabling them to navigate the challenges ahead.
At Extreme Investor Network, we stay ahead of the curve in tracking market developments and providing valuable insights for investors looking to capitalize on emerging trends in the finance world. Stay tuned for more updates on the semiconductor industry and other key sectors shaping the future of finance.