South Korea’s ruling party had on Monday, proposed a special chips act on to allow chipmakers subsidise and exempt them from a national cap on working hours, so they can tackle the potential risks from measures threatened by the incoming U.S. President Donald Trump.
The semiconductor industry is important for the trade-dependent economy, Asia’s fourth biggest, with chips making up 16% of total exports in 2023.
The South Korean President, Yoon Suk Yeol had just last week, warned of the risks emanating from Trump’s threat of stiff tariffs on Chinese imports that could cause Chinese rivals to cut export prices and undercut Korean chip firms overseas.
Although the bill needs approval from the main opposition party to be passed, chipmakers like Samsung Electronics are also also expecting growing competition from rivals in China, Taiwan and others.
Meanwhile, Lee Chul-gyu, one of the bill’s sponsors, lawmaker had said in a statement;
“It will help Korean companies fend off challenges as China, Japan, Taiwan and the United States give subsidies to manufacturers amid a semiconductor trade war between China and the United States.”
Some employees involved in research and development will be permitted to work longer hours under the bill (note that this bill aims to abandon the labour law limiting weekly hours worked to a maximum of 52).
In October, Trump threatened to remove federal chip subsidies for Taiwan’s TSMC, South Korea’s Samsung and SK Hynix and others, in favour of import tariffs.
