South Korea to launch $34B fund for key sectors like chips and autos

South Korea will create a $34 billion policy fund to promote businesses engaged in strategic technologies like chips and automobiles in the face of growing global competition and protectionism, the government said.

The government also unveiled new policies to support the initiative by luring international talent to work in innovative businesses.

"Competitiveness in advanced strategic industries has emerged to be the core of national economic security amid heightened external uncertainty under the new U.S. administration," the government said.

Since taking office again in January, U.S. President Donald Trump has threatened to impose tariffs on a number of industries and significant trading partners, including chips, vehicles, and biopharmaceuticals.

Over the next five years, businesses in important national industries will be able to use the 50 trillion won ($34.37 billion) fund of the state-run Korea Development Bank through low-cost loans and other investments. In response to growing global competition and supply chain fragmentation, South Korea has designated 12 industries as "national strategic technologies" in recent years, providing targeted financial support and protection. These include, among other sectors, semiconductors, biopharmaceuticals, future mobility, rechargeable batteries, aerospace, and artificial intelligence.

The fund will also incorporate a financial assistance package created especially for the semiconductor sector the previous year. Separately, South Korea announced that it would facilitate the entry of competent foreign workers with international expertise into advanced areas of domestic companies by providing "top-tier" visas and permanent residency.