South Korea Chip Tax Credit 2026: Seoul Moves to Solidify Global AI Leadership

Seoul isn't letting its guard down in the global silicon war. On December 28, 2025, South Korea's Ministry of Economy and Finance signaled a massive extension and expansion of its semiconductor investment incentives. The move aims to shield domestic giants from rising global competition and cooling capital expenditure cycles.

The South Korea Chip Tax Credit 2026 Roadmap

According to reports by Reuters, the government is considering raising the facility investment tax credit from the current 15% to as much as 25% for major corporations. This specific focus on the 'South Korea chip tax credit 2026' initiative will prioritize High Bandwidth Memory (HBM) and AI-specific logic chips. This is a clear signal to Samsung Electronics and SK Hynix to accelerate their $450 billion long-term investment in the Yongin semiconductor cluster.

Closing the Gap with the US CHIPS Act

While the US offers direct cash grants via the CHIPS Act, Korea has historically relied on tax breaks. Analysts suggest that the new 2026 expansion could improve corporate cash flow by over $7.5 billion annually, providing a crucial cushion for R&D in the next-generation 2nm process.