By Hyunjoo Jin
SEOUL (Reuters) -South Korea’s ruling occasion launched laws on Monday to offer chipmakers subsidies and an exemption from a nationwide cap on working hours, to sort out potential dangers from measures threatened by incoming U.S. President Donald Trump.
The semiconductor business is crucial for the trade-dependent economic system, Asia’s fourth greatest, with chips making up 16% of whole exports final yr.
Final week, South Korean President Yoon Suk Yeol warned of the dangers stemming from Trump’s menace of steep tariffs on Chinese language imports that would immediate Chinese language rivals to slash export costs and undercut Korean chip companies abroad.
The ruling occasion’s invoice comes as chipmakers like Samsung Electronics (KS:) additionally brace for rising competitors from rivals in nations equivalent to Taiwan and China.
Shares of Samsung and SK Hynix prolonged losses on Tuesday on issues about Trump’s potential tariffs and U.S. restrictions on AI chip gross sales to China.
The invoice will assist Korean firms fend off challenges as China, Japan, Taiwan and america give subsidies to producers amid a semiconductor commerce warfare between China and the U.S., one of many invoice’s sponsors, lawmaker Lee Chul-gyu, mentioned in a press release.
Nonetheless, the laws is prone to face an uphill battle to achieve approval from the liberal opposition occasion, which controls a majority in parliament, mentioned Greg Noh, an analyst at Hyundai Motor (OTC:) Securities.
Below the invoice, some workers concerned in analysis and improvement will likely be allowed to work longer hours, waiving a labour legislation that limits weekly hours labored to a most of 52.
This month, Samsung’s labour union opposed such a transfer, saying the corporate was making an attempt responsible the legislation for its “management failure”.
Final month, Samsung apologised for its disappointing revenue, having lagged rivals TSMC and SK Hynix in tapping booming demand for synthetic intelligence chips.
In October, Trump threatened to scrap federal chip subsidies for Taiwan’s TSMC, South Korea’s Samsung and SK Hynix and others, in favour of import tariffs.
