South Korea plans tax breaks to support chipmakers

The South Korean government plans to increase tax breaks for capital expenditures of major chip companies by up to 25 percent. The South Korean government plans to increase tax breaks for capital expenditures of major chip companies by up to 25 percent, after President Yoon Suk Yeol called for bigger incentives to boost the chip sector. Large companies will be eligible for tax credits of up to 15 percent on investment in manufacturing facilities, up from 8 percent planned under a law passed last month, and smaller companies will be eligible for tax breaks of up to 25 percent on capital expenditures, up from 16 percent, the ministry said. Any additional investment in chip production after 2023 would receive an additional 10 percent tax break. The expanded plan, to be proposed this month, would reduce the tax burden on companies by more than 3.6 trillion won ($2.8 billion). Korea, home to leading memory makers Samsung Electronics and SK Hynix Inc., has been locked in an escalating battle between the United States and China over semiconductors that control key technologies from artificial intelligence to missile defenses.