The South Korean government has designated seven sectors, across artificial intelligence, semiconductors and batteries, as the first strategic areas to receive support from the country’s 150 trillion won ($100 billion) growth fund, according to a policy briefing by the Financial Services Commission, Friday.
Named “Public Growth Fund,” the public-private fund is one of the key economic pledges made by President Lee Jae Myung.
For the first round of execution, the support will be directed at seven areas: development of an advanced AI semiconductor foundry; nurturing a Korean AI chip firm; renewable energy power generation; establishment of a national AI computing center; materials for secondary batteries; power for semiconductor manufacturing; and semiconductor energy infrastructure.
“The Public Growth Fund will serve as the core vehicle to lead advanced industries and drive economic growth,” FSC Chairman Lee Eog-weon said at the policy briefing.
“In response to the global investment competition, the public and private sectors will jointly mobilize 30 trillion won a year over five years, channeling a total of 150 trillion won into Korea’s growth engines for the next two decades.”
Lee said 40 percent of the fund will be used for investment projects that can help induce regional growth. The bar will be raised to 45 percent by 2028.
In a move to boost the local stock market, the authorities plan to adopt initiatives to encourage the country’s secondary stock bourse, the Kosdaq. As of Friday, the benchmark Kospi's total market cap stands at 3,318 trillion won, nearly than seven times the Kosdaq's 496 trillion won valuation.
“The Kosdaq market must play its role in creating a virtuous funding cycle that allows both public and companies to grow together,” Lee said, adding, “The bourse will be strengthened to enhance trust and foster innovation.”
Listing and delisting regulations will be tightened. Underperforming companies will be removed from the bourse. The FSC plans to devise measures to attract more institutional investment on the bourse, which is currently dominated by retail investment.
silverstar@heraldcorp.com
