South Korea has unveiled plans to establish a $34 billion policy fund aimed at providing financial support to companies operating in strategic sectors such as semiconductors and automotive manufacturing. The government’s decision is driven by escalating global competition and rising protectionist policies, particularly from the United States.
The state-run Korea Development Bank will manage the 50 trillion won fund, which will be distributed to firms in key industries over the next five years. The support will take the form of low-interest loans and investments. This initiative is part of South Korea’s broader strategy to strengthen its position in industries vital to its national economic security.
As the global landscape grows increasingly competitive, South Korea has identified 12 sectors as “national strategic technologies,” including semiconductors, future mobility, rechargeable batteries, biopharmaceuticals, aerospace, and artificial intelligence. These sectors will receive enhanced financial backing and protection to address challenges such as the fragmentation of global supply chains.
Additionally, the government’s semiconductor support package, introduced last year, will be incorporated into this new fund. In a bid to attract talent, South Korea also plans to offer “top-tier” visas and permanent residency to skilled foreign workers with experience in global firms, making it easier for them to join the country’s advanced technology sectors.