South Korea names HBM and advanced packaging strategic, raises tax credits and fast tracks permits
Kai Tanaka ·
South Korea approved an amendment on Tuesday that designates high bandwidth memory and advanced packaging as national strategic technologies, raises tax credits for chip investments, and fast tracks permits at new sites. The Ministry of Trade, Industry and Energy said the changes take effect this month to lock in capacity for artificial intelligence demand.
The shift matters because SK Hynix and Samsung Electronics control most HBM output and are adding lines for HBM3E and the next node. Easing capex and utility bottlenecks in Cheongju, Icheon, Giheung, and the Yongin cluster could influence supply for Nvidia and other accelerator vendors in 2026 and 2027.
Policy details MOTIE said facility investment tax credits for large companies will rise to 25 percent for the newly listed items, with small and mid sized firms eligible for 35 percent, and an extra incremental credit for expansions above a recent baseline. The amendment sets 30 day target windows for power, water, and environmental permits at designated complexes, and allows phased construction before final reviews under specified conditions.
The strategic list now covers through silicon via stacking, hybrid bonding, silicon interposers, redistribution layers, HBM controllers, and advanced substrates. This extends eligibility to domestic suppliers such as Simmtech, Hana Micron, LB Semicon, and Nepes, not only the memory makers. The National Assembly tied the program to pre serviced land and utility build outs at national complexes, including Yongin and Pyeongtaek.
Company plans and market impact SK Hynix is ramping its M15X HBM facility in Cheongju and preparing initial Yongin capacity, while Samsung is converting lines in Giheung and Pyeongtaek for HBM and packaging. Industry trackers estimated SK Hynix led the HBM market last year, with Samsung second and Micron gaining share after new HBM3E qualifications. Faster permitting and higher credits cut timelines and cost of ownership for TSV and packaging equipment that remain supply constrained.
The move comes as Japan funds advanced packaging and materials, Taiwan’s TSMC expands CoWoS capacity, and the United States awards CHIPS Act grants to memory projects. Cross border controls on advanced GPUs continue to reroute demand for AI memory to non China markets, intensifying competition for qualified HBM supply.
If Seoul accelerates investment and utilities for HBM and packaging, Korea can anchor the upstream of AI memory for the next cycle. That would shape pricing power, delivery schedules, and platform roadmaps for Nvidia, AMD, and major cloud providers through 2027.