Batteries, Robotics, AI. The Asian country seeks to safeguard the global competitiveness of its industry.
South Korea’s government announced on Wednesday plans to establish a $34.4 billion (50 trillion won) “Advanced Strategic Industries Fund” aimed at bolstering its high-tech sectors, including semiconductors, artificial intelligence, robotics, and batteries. With the fund, the government in Seoul seeks to safeguard the country’s future global competitiveness. Besides large corporations, the tool explicitly also targets small and medium-sized enterprises across the entire supply chain of these industries to bolster the whole industry. President Choi Sang-mok highlighted that “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.” Governments would engage in a “war without gun smoke,” he added.
The support methods will include long-term loans and equity investments tailored to company needs. The government will issue government-backed bonds to finance the fund, with operational costs covered by the Korea Industrial Bank’s own resources. The fund’s legislation is expected to be submitted to the National Assembly in March 2025.
High-Tech Industry Hungry for Critical Minerals
Less than a month ago, South Korea announced another fund to strengthen the supply chains of critical minerals essential to its industry (we reported). The country lacks large-scale domestic mining and refining capacities and is highly import-dependent, especially on industry leader China. With the fund, the government plans to catalyze investment in the sector to change this. Another approach South Korea is taking involves international cooperation with resource-rich countries, such as Malaysia, with a partnership announced in November.
Photo: iStock/Jae Young Ju