South Korea designates HBM packaging as “national strategic” tech, unlocking higher tax credits for Samsung and SK Hynix

South Korea on Wednesday added advanced memory packaging, including through-silicon via HBM stacking, to its list of national strategic technologies, a designation that triggers higher tax credits and expedited permitting for domestic investments. The Ministry of Trade, Industry and Energy said the updated list takes effect immediately, targeting Samsung Electronics and SK Hynix as they scale HBM3E and next generation HBM4 capacity in the Yongin and Icheon clusters.

The change matters because HBM has become the bottleneck for AI compute, and overseas subsidies are pulling Korean capex abroad. US CHIPS Act packages for advanced packaging and assembly, as well as TSMC’s CoWoS capacity in Taiwan and Japan, have intensified competition for where HBM and related 2.5D integration will sit over the next two years.

Under the designation, facility and R&D spending on hybrid bonding, TSV formation, wafer thinning and stacking, interposer and substrate technology, and high density test and burn-in can access the highest tier of the K Chips tax regime, according to the ministry’s notice. Supply chain firms such as Hana Micron, Nepes, LB Semicon, Hanmi Semiconductor, SFA, and Jusung Engineering are listed as eligible ecosystem participants if projects are located in Korea and tied to domestic production.

Officials said the incentives are contingent on capacity additions inside Korea and on plans to localize key inputs including ABF class substrates and photoresists, a response to recurring substrate and materials shortages. The government also flagged dedicated infrastructure funding for water and power at the Yongin mega cluster, a multi year project anchored by Samsung that has been delayed by utility build out.

SK Hynix holds a lead in HBM shipments for Nvidia accelerators, while Samsung has focused on HBM3E ramp and HBM4 development. Both firms face pressure to qualify more packaging at home as Nvidia and other customers diversify suppliers and as TSMC expands advanced packaging in Kumamoto for Japanese automotive and AI demand.

For global chipmakers and AI platform companies, the Korean shift signals a bid to rebalance packaging away from Taiwan and the United States by tying generous credits to onshore HBM capacity and tooling. If it succeeds, procurement teams will see a denser Korean ecosystem for memory to package integration, which could alter vendor qualification maps for AI accelerators over the next product cycles.