Lee vows tax benefits, special law for chip industry

Rep. Lee Jae-myung, presidential candidate for the Democratic Party of Korea, said Monday he seeks to expand tax benefits and push the National Assembly to pass the “semiconductor special bill” to bolster the nation’s chip industry.

But he likely referred to the latest version of the bill drafted by the Democratic Party, which does not include the most debated section, which would exempt the chip industry from the country's legally mandated maximum workweek of 40 hours plus 12 hours of overtime.

“I plan to turn (South Korea) into the world’s No. 1 chipmaker backed by superior technology that outranks (that of rivals),” Lee said in a policy pledge posted on Facebook.

“The semiconductor industry, which has been a core engine behind South Korea’s economic growth, is now facing a crisis,” Lee added.

Lee pointed to risks stemming from shifts in the global supply chain and rising competition in artificial intelligence chips as key factors feeding the crisis surrounding Korea’s chipmakers.

To counter the risks, he plans to adopt further tax benefits for local chipmakers, including a maximum 10 percent tax credit for manufacturing costs.

He also vowed to support the Assembly to pass the “semiconductor special bill,” which aims to enhance the competitiveness of Korea’s semiconductor industry.

The previous version of the bill that failed to pass a parliamentary subcommittee review in February, to be voted on in a plenary session, pushed for an exemption for the semiconductor industry from the country's maximum 52-hour workweek, alongside bigger tax benefits and relaxed regulations.

The government, the ruling People Power Party and major business lobby groups had called for the swift passage of the previous version of bill to adopt greater flexibility in research and development work for local chipmakers. The country's top two umbrella labor unions, on the other hand, had voiced strong criticism and protests against the bill.

The rival parties, so far, have been unable to reach a consensus over the specific clause exempting chipmakers from the 52-hour workweek limit.

Lee had said in a speech at the National Assembly on Feb. 10 that work hours should be gradually reduced to a four-day workweek, and had alluded possibly to exempting the semiconductor industry from the 52-hour limit, saying, "Even if work hours are flexible in certain industries, it should not be a means to increase the total work hours or avoid compensating the labor."

The former Democratic Party leader did not mention whether he has changed his stance on this issue in Monday’s Facebook post. However, he did blame the conservative People Power Party for the bill’s failure to pass in the Assembly.

Lee also vowed to foster R&D and resolve the shortage of chipmaking workers.

“Besides (fostering) the memory chips industry, which South Korea already has an upper hand in, I plan to support R&D and establish the necessary infrastructure, including graduate schools (to resolve the worker shortage) in a bid to strengthen the system's semiconductor and foundry competitiveness,” he explained.

In the afternoon, Lee visited SK hynix's headquarters in Icheon, about 50 kilometers southeast of Seoul, where he met with the chip giant's CEO Kwak Noh-jung and pledged to "find ways" to bring about the growth of the local semiconductor industry.