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Finance ministry to help build infrastructure for SK hynix

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The headquarters of SK hynix in Icheon, Gyeonggi Province / Korea Times file
The headquarters of SK hynix in Icheon, Gyeonggi Province / Korea Times file
By Lee Kyung-min

An industrial complex housing SK hynix in Yongin, Gyeonggi Province, will be granted increased supplies of water and electricity ― crucial elements needed to fabricate memory chips ― to demonstrate the country's efforts in assisting the advancements of "strategic items," government sources said, Friday.

The support measures follow growing calls for help in resolving the current global chip shortage and maintain a lead against Taiwan and China as semiconductors are being considered as "strategic products" amid surging demand.

Officials of the Ministry of Economy and Finance held working-level discussions with the SK affiliate, Friday, to explore the best possible support measures by the government to remove bureaucratic red tape hampering the speedy manufacture of the devices.

"The meeting was about hearing challenges and ways to promptly resolve them," a ministry official close to the matter said. "The task of helping chipmakers is one of the policy priorities of Deputy Prime Minister Hong Nam-ki. The assistance will be about how best to improve the overall infrastructure in the complex. Whether specifics will be announced next week has yet to be decided," he added.

Friday's meeting essentially revisits an earlier request by the SK affiliate which sought an overhaul ― or significant strengthening ― of water and electricity facilities in the complex denied by the ministry citing a lack of legal grounds.

Under the relevant law, no government subsidy should be granted to companies in industrial complexes in Seoul or surrounding areas.

Meanwhile, the much-rushed assistance is part of the ministry's plan to nurture the industry announced a day earlier.

Under th plan, tax deductibles for research and development (R&D) will be increased to between 20 percent and 30 percent, far higher than the current limit of 2 percent.

Deductibles for facility investment spent on what the government categorizes as "new growth engines and core technologies" will be increased to up to 3 percent from around 1 percent.

The deductibles for R&D spending can be increased further to 40 percent, pending the passage of a bill proposed by a ruling party lawmaker.

A 550 billion-won ($490 million) fund was set up to support semiconductors with non-memory functions, an initiative strengthened by the addition of a 250 billion-won fund to be spent on the materials, parts and equipment industries. Also under review is a long-term, low-interest loan for facility investment. More comprehensive support will be announced in detail within this month.



Lee Kyung-min lkm@koreatimes.co.kr


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