South Korean president Yoon Suk Yeol calls strategy meeting to boost chip, battery sectors

The spokesperson did not provide further details, but the comment came a day before the country’s central bank is widely expected to leave the interest rates steady for a second consecutive meeting on Tuesday to support the slowing economy.

South Korea’s economy, heavily dependent on trade and chip exports, has been decelerating in the face of a weakening global economy and still-sluggish demand from neighbouring China. Local consumers are also holding back on spending after interest rate rises.

South Korean battery and chip shares rallied in early trade on Monday. LG Energy Solution shares were up 2.76% as of 2:36 p.m.(0536 GMT) compared to the wider KOSPI’s 0.94% rise, while SK Hynix shares saw a 2.58% jump.

Semiconductor subsidy concerns

Last month, Yeol said the criteria for new US semiconductor subsidies was worrying companies such as Samsung Electronics Co Ltd and SK Hynix Inc, a concern shared by the world’s leading contract chipmaker in Taiwan.

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Conditions include sharing excess profit with the US government, and three industry sources said the application process itself could expose confidential corporate strategy.During his meeting with United States trade representative Katherine Tai in Seoul, Yeol asked the US government to consider companies’ concern over an “excessive level of information provision”, the presidential office said.

Subsidies would come from a $52 billion pool of research and manufacturing funds earmarked under the United States’ so-called Chips Act, for which the Commerce Department announced guides and templates this month.

SK Hynix parent SK Group plans to invest $15 billion in the US chip sector, including to build an advanced chip packaging factory, and has said it is considering applying for funding. Samsung is building a chip plant in Texas that could cost more than $25 billion and has said it is reviewing the guidelines.

However, funding applications may require detailed cost structure information as well as projected wafer yields, utilisation rates and price changes, which three Korean chip sources told Reuters was akin to revealing corporate strategy.