South Korea plans $34 billion fund for strategic sectors like chips and autos

SEOUL (Reuters) - South Korea will establish a $34 billion policy fund to provide financial support to companies involved in strategic technologies such as chips and autos amid intensifying global  competition and protectionism, the government said on Wednesday. 

 

To help underpin the move, the government also announced new policies aimed at attracting talent working in cutting-edge industries from around the world.

 

"Competitiveness in advanced strategic industries has emerged to be the core of national economic security amid heightened external uncertainty under the new U.S. administration," the government said, calling it a "war without gun smoke". 

 

Since returning to office in January, U.S. President Donald Trump has initiated a series of tariff threats targeting major trading partners and various industries, such as chips, autos and biopharmaceuticals. 

 

The state-run Korea Development Bank’s 50 trillion won ($34.37 billion) fund will be offered to companies in national strategic industries in the form of cheap loans and other investments over the next five years.

 

South Korea in recent years has designated 12 industries as "national strategic technologies" with targeted financial support and protection to respond to intensifying global competition and the fragmentation of supply chains.

 

These include industries such as semiconductors, future mobility, rechargeable batteries, biopharmaceuticals, aerospace and artificial intelligence, among others.

 

A financial support package prepared specifically for the semiconductor industry last year will also be integrated into the fund.

 

Separately, South Korea said on Wednesday it would offer "top-tier" visas and permanent residency to skilled foreigners with experience working in global firms to make it easier for them to join domestic companies in advanced sectors.

 

($1 = 1,454.7000 won)

 

(Reporting by Jihoon Lee; Editing by Ed Davies)