Semiconductor companies' long-cherished wish for ”preemptive cash support measures” realized - South Korean report

A system of "preemptive tax credit rights" will be implemented, which will allow semiconductor companies to receive future tax credits before they begin business activities. If this system is introduced, Samsung Electronics and
It is expected that this will be the preemptive support that has been long awaited by major domestic semiconductor companies such as SK Hynix, as well as materials, parts, and equipment manufacturers.
In a recent interview, Kim Tae-nyeon, a member of the Democratic Party of Korea, said that the so-called "Chips 3 Bill" is in the preparation stage and that the tax credits for semiconductor companies will be reduced.
The government revealed that it is preparing to submit to the Diet a bill to amend the Taxation Special Measures Restriction Act, the main focus of which is to create a market in which taxpayers can make purchases.
This is a trade-off between the Inflation Reduction Act (IRA) and the Advanced Manufacturing Production Tax Credit (AMPC) subsidy.
By benchmarking the US market, it is expected that companies will be able to receive subsidies in practice, and will also be able to secure technological competitiveness through upfront investment.
AMPC is a system that gives tax credits to companies that produce eco-friendly products in the United States, such as automobile, battery, and solar power companies.
Crux Climate, which handles the transfer of gold, began operations last year. Through this platform, future tax credit rights can be sold.
This can be useful for companies that need to secure funds for the construction of production facilities, etc. In fact, semiconductor companies such as Samsung Electronics and SK Hynix have
However, Korea does not have a subsidy system and no support has been provided.
"Investments must be made in semiconductors, but if we receive tax credits after producing and selling semiconductors, we will be behind," he said. "If we can receive tax credits first, we can get them first."
"This will enable international investment and ensure the competitiveness of cutting-edge semiconductors," he said. He also stressed the need to propose a bill, saying, "We should introduce a system for transferring tax credit rights to third parties."
A source in the semiconductor industry said, "With memory semiconductor prices on the rise, investment is urgent to stay ahead of the market," and added, "The tax credit transaction will allow us to increase the amount of tax credits on investments."
"If we can convert this into cash, it is likely to lead to upfront investment."