Ministry of Trade, Industry and Energy: 'Prioritize non-capital regions' for semiconductor cluster designation in Semiconductor Special Act enforcement decree

South Korea's Ministry of Trade, Industry and Energy has taken a significant step towards fostering regional development in the crucial semiconductor industry. The ministry announced on Tuesday the legislative pre-announcement of a revised enforcement decree for the Semiconductor Special Act, which explicitly includes provisions to "prioritize non-capital regions" when designating semiconductor clusters.

This directive aims to counter the historical concentration of industrial development in the Seoul metropolitan area and promote a more balanced distribution of economic opportunities across the country. The decree stipulates that when considering applications for semiconductor cluster designations, factors such as "contributing to balanced national development and resolving industrial disparities between regions" must be considered. It further mandates that "the Minister of Trade, Industry and Energy shall prioritize non-capital regions when designating semiconductor clusters."

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contributing to balanced national development and resolving industrial disparities between regions

The designated areas eligible for semiconductor cluster status include economic free zones, specialized complexes for materials, components, and equipment, R&D special zones, and "opportunity development zones" aimed at fostering balanced growth. Additionally, regions recognized by the Minister of Trade, Industry and Energy as capable of forming a cluster of companies involved in semiconductor design, manufacturing, supply, research, sales, or support are also eligible.

This policy shift signals a concerted effort by the South Korean government to leverage the booming semiconductor industry as a catalyst for regional economic revitalization. By incentivizing the development of semiconductor infrastructure and related businesses outside the densely populated capital region, the government hopes to create new growth engines and employment opportunities in less developed areas, thereby mitigating regional economic imbalances.

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the Minister of Trade, Industry and Energy shall prioritize non-capital regions when designating semiconductor clusters.