In response to rapid technological changes and intensifying global competition, the Korean government is reviewing a significant expansion of national funding for infrastructure in advanced industry clusters situated in regions distant from the capital. The policy was discussed at a joint fiscal support meeting led by Cho Yong-beom, Director General of Budget at the Ministry of Economy and Finance, and Oh Seung-chul, Director General of Planning and Coordination at the Ministry of Trade, Industry and Energy. The meeting focused on strengthening Korea’s industrial competitiveness, particularly in light of the growing importance of artificial intelligence and advanced manufacturing. The government aims to play a proactive role in supporting domestic industries through targeted fiscal measures.
The proposed changes will directly impact companies investing in national strategic industry clusters, especially those in semiconductors, secondary batteries, and biotechnology. Firms entering these clusters outside the Seoul metropolitan area currently bear significant infrastructure costs for roads, water, wastewater, and electricity. Under the new plan, the national government would double its financial support for these costs, making regional investment more attractive. Industry associations, including the Semiconductor and Battery Industry Associations, have welcomed the initiative, emphasizing its importance for maintaining Korea’s leadership in advanced sectors.
Implementation of the expanded funding is scheduled for the first half of 2024, pending approval by the National Strategic Industry Committee chaired by the Prime Minister. The government will determine the scale of corporate investments and adjust support limits accordingly. Additionally, follow-up measures such as the establishment of a special semiconductor accounting system are being advanced in line with the Semiconductor Special Act. The fiscal authorities have outlined four major investment directions for 2027, including full-cycle support for advanced industries, regional anchor company attraction, manufacturing advancement, and RE100-based industrial cluster development.
Frequently asked questions include: What infrastructure costs are covered by the expanded funding? The support will cover roads, water supply, wastewater management, and electricity for companies in designated clusters. Who is eligible for the increased funding? Firms investing in national strategic industry clusters located outside the Seoul metropolitan area are eligible. When will the new funding limits take effect? The changes are expected to be finalized and implemented in the first half of 2024 after committee approval.
The Korean government’s decision to consider doubling infrastructure funding for advanced industry clusters in non-metropolitan areas is a targeted response to global technological shifts and competitive pressures. By focusing on sectors such as semiconductors, batteries, and biotechnology, the policy aims to foster regional development and maintain Korea’s industrial leadership. The structured timeline and stakeholder involvement suggest a well-coordinated approach, and the anticipated reduction in investment barriers could drive significant growth in regional innovation hubs. This move demonstrates Korea’s proactive stance in aligning fiscal policy with industrial strategy.