Korea unveils 13-step semiconductor deregulation plan to speed up chip investment

The industry ministry said Friday it would overhaul customs and permitting procedures for semiconductor plants as part of a 13-point deregulation package meant to speed up investment in the country's flagship export industry.

Announced at a presidential meeting on regulatory reform, the measures were drawn up jointly with the customs service, the land and environment ministries and the finance ministry, and are built around three goals the ministry described as shortening, creating and better using time.

Much of the package targets the bonded factories through which 95 percent of Korea's semiconductor exports are manufactured and processed. Chipmakers currently need a separate bonded-factory licence for each fab and must renew it every five to 10 years, and they face additional procedures to move goods within industrial complexes. Under the plan, entire industrial complexes would be designated as consolidated bonded zones, exempting companies from renewals, fees and bonded-transport steps.

The customs service contributed six of the tasks: expanding bonded construction sites to coastal areas, allowing deferral of duties on foreign equipment used in construction, widening designated consolidated bonded zones to the Honam region, Daegu-North Gyeongsang Province and Pyeongtaek-Yongin, simplifying duties on research materials, broadening the scope of components brought in for spare parts and repairs, and letting exporters ship goods first and file their export declarations while the cargo is in transit.

"It takes a full six to seven hours from the factory to the airport and loading the goods," an export manager at a chipmaker outside the capital region said. "Because we can only move products out of the factory after the export declaration is accepted, there were times I waited anxiously, worried we would miss the flight."

Trade, Industry and Energy Minister Kim Jung-kwan framed the package as a matter of speed rather than simple removal of rules. "Competition in semiconductors is a race against time," Kim said. "This plan does not merely eliminate regulations. It cuts the time companies spend waiting, secures the time needed for research and demonstration, and has the government move in step with companies' investment schedules."

A bill to allow simultaneous permitting, compensation and design work at semiconductor industrial complexes was submitted on July 30 and is the legal basis for the ministry's fast-track approach. The government is also pushing a law creating a single mega-regional special zone carrying about 320 regulatory exceptions, which the ministry said would be the largest such menu in a single statute, with the bill submitted on Oct. 20 and nationwide designation targeted for the first half of 2027.

A semiconductor innovation and growth support team launched on Oct. 20 will track each company's investment timetable from plant planning through groundbreaking and operation, working with a presidential committee on chip industry competitiveness.