S. Korea introduces special chips act amid US challenges

South Korea’s ruling party introduced a special chips act to support chipmakers and exempt them from working hour restrictions, in response to potential challenges posed by US President Donald Trump.

The semiconductor industry is vital for South Korea’s economy, accounting for 16 per cent of total exports. President Yoon Suk Yeol cautioned about the risks of Trump’s proposed tariffs on Chinese imports, which could impact Korean chip firms.

The bill requires approval from the main opposition party to pass. It aims to support Korean chipmakers like Samsung Electronics amid increasing competition from China, Taiwan, and other countries.

Lawmaker Lee Chul-gyu stated that the bill will help Korean companies compete against rivals receiving subsidies in the semiconductor trade war between China and the United States.

The bill aims to allow some employees in research and development to work longer hours by waiving the labour law limiting weekly hours to 52.

Samsung’s labour union opposed this, accusing the company of blaming the law for its management issues.

Samsung recently apologised for lower profits compared to competitors TSMC and SK Hynix, as Chinese companies increase competition in the AI chip market.

In October, Trump threatened to remove federal chip subsidies for TSMC in Taiwan, Samsung and SK Hynix in South Korea, and other companies, in favour of import tariffs.

Attribution: Reuters

Subediting: M. S. Salama