The South Korean government is reportedly considering SK hynix's (000660.KS) Yongin semiconductor cluster as the leading candidate for the first investment from the 150 trillion won ($110 billion) National Growth Fund, according to sources familiar with the matter.
The move signals the beginning of large-scale infrastructure investment to address surging AI semiconductor demand, while expanding collaboration opportunities for startups through strengthening the domestic semiconductor ecosystem.
SK Group is planning investments of up to 600 trillion won in the cluster. The Financial Services Commission has established a National Growth Fund Strategy Committee, and the Korea Development Bank's secretariat plans to announce the selection process for private equity fund investors in January next year.
CVC Investment Plunges
Corporate venture capital investment by major Korean conglomerates fell sharply to 305.6 billion won, less than half of the previous year's 647.5 billion won, putting the brakes on venture market revitalization.
Kim Hyun-yeol, a researcher at the Korea Institute of Finance, suggested that regulations on the separation of banking and commerce should be eased to guide CVCs from simple venture investment toward M&A investment.
Current Fair Trade Act regulations limit external fundraising by CVCs under general holding companies to a maximum of 40%, cap debt ratios at 200% of equity capital, and restrict overseas investment to just 20% of total assets.
"Despite intensifying global competition to discover innovative companies in AI and semiconductors, CVC investment by Korean conglomerates is actually declining due to these regulations," Kim said.
SK hynix Partners with Small Fabless Firms
SK hynix is entering the specialty DRAM production business with domestic small and medium-sized fabless companies, strengthening the domestic semiconductor ecosystem.
The company plans to manufacture specialty DRAM on consignment from a domestic small fabless firm. Specialty DRAM products, including low-power DRAM for IoT devices and multi-chip packages, have fewer customers and lower profitability compared to commodity DRAM or high-bandwidth memory, which is why SK hynix had not engaged in this business previously.
However, analysts say the company has entered this business as domestic fabless firms have found it increasingly difficult to secure production lines amid the recent memory super cycle.
AI Cooperation Strengthened
President Lee Jae-myung is scheduled to meet with SoftBank Group Chairman Masayoshi Son on Thursday to discuss AI and semiconductor cooperation and related infrastructure investment.
Son reportedly requested the meeting first, expressing confidence in the Korean government's AI policy direction. The meeting is expected to cover cooperation on the "UAE Stargate Project," for which Korea signed a memorandum of understanding with the UAE on December 18.
The Presidential Office explained this is part of efforts to build a "triangular formation" comprising BlackRock (capital), OpenAI (technology), and Nvidia (supply chain) to elevate Korea to a top-three global AI power following President Lee's inauguration.
Trade Minister to Visit China
Minister of Trade, Industry and Energy Kim Jung-kwan will visit China next week for bilateral talks with Chinese Commerce Minister Wang Wentao, marking the first such visit by a Korean trade minister in approximately six years.
The discussions are expected to cover Phase 2 FTA negotiations on services and investment, cooperation on rare earth minerals, and the formal lifting of restrictions on Korean entertainment content.
U.S. Auto Tariffs Reduced
Tariffs on automobiles and auto parts exported to the United States have been officially reduced from 25% to 15%, with the reduction retroactively applied from November 1.
Tariffs on lumber products, which were set to reach up to 50% from January 1 under Section 232 of the U.S. Trade Expansion Act, have also been confirmed at 15%. Tariffs on aircraft and aircraft parts have been fully exempted.
The U.S. had promised to lower tariffs from the first day of the month in which legislation necessary to implement the Korea-U.S. tariff agreement was introduced. After the ruling party introduced the Special Act on Investment in the United States on November 26, the retroactive date was set to November 1.
