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Korea eyes extended lead over China in chips, ships with $350B U.S. partnership

Published: 19 Nov. 2025, 18:38

JIN MIN-JI
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Finance Minister Koo Yun-cheol speaks during a press conference held at the government complex in Sejong on Wednesday. [MINISTRY OF ECONOMY AND FINANCE]

Korea’s collaboration with the United States through a massive investment could help widen its lead over China in key industries like semiconductors and shipbuilding, where Beijing is rapidly catching up, according to the Ministry of Economy and Finance on Wednesday.

“The speed of China’s catch-up is extremely fast, even in industries like chips that are being led by Korea,” said Finance Minister Koo Yun-cheol during a press conference held in the government complex in Sejong on Wednesday. “China is determined to do everything possible to outpace Korea in semiconductors.”

Korea-U.S. collaboration under the promised investment package will help Korea secure a central role in the key industries by establishing a global value chain amid rising international trade restrictions, from export curbs to tariff imposition and natural resource weaponization, Koo added.

The remarks were made after Korea and the United States on Friday sealed a memorandum of understanding for a $350 billion investment package, including $200 billion in cash investment and $150 billion for massive shipbuilding projects in the United States, in exchange for lowered U.S. tariffs on most Korean goods to 15 percent.

“We must collaborate with the United States to build the world’s best shipbuilding sector — one that even China cannot catch up with,” said Koo. “We need to adopt a proactive approach, positioning Korean shipbuilding as the top in the global value chain.”

Regarding the $200 billion investment, he added, "The United States is focused on sectors like semiconductors, energy, bio, AI and quantum technology. We should take a proactive approach by proposing projects in advance and aiming for Korea to secure a leading position in the value chains of these future growth industries in collaboration with the United States.”

Hanwha Philly Shipyard in Pennsylvania [HANWHA OCEAN]

To accelerate the imposition of lower tariffs on the heels of the trade deal, Koo reaffirmed that the government will seek to submit a special law to the National Assembly designed for the swift and flexible implementation of Seoul’s investment in Washington within November.

“It has to be submitted to the National Assembly this month because the first day of submission will mark the point at which we coordinate with the United States on the tariff reduction,” Koo said. The time frame for when the tariff reductions will take effect was not included in the fact sheet Washington released last week.

He added that the government plans to offer incentives for long-term stock investors and will work to maintain foreign exchange stability, as the won has remained weak against the dollar despite sealing a deal with the United States.

“We plan to actively promote incentives for individuals who stay invested in the capital market for a long time or make long-term investments in individual stocks — focusing more on small shareholders rather than major shareholders,” Koo said, noting that discussions are currently underway. But, he added, the most effective way to eliminate the so-called Korea discount — the chronic undervaluation of local stocks — is to enhance the competitiveness of Korean companies and make them attractive to investors.

Boosting the benchmark Kospi to 5,000 points has been a key agenda item for the Lee Jae Myung administration. To achieve this, the government is pushing a reform policy agenda. It is ironing out the details of dividend tax reform and the third round of Commercial Act revision, which requires companies to retire treasury shares within fixed deadlines, is also expected to be passed this year.

Regarding the weak won, partly driven by capital outflows from foreign investment and companies’ decisions not to convert dollars into won, Koo told companies they should acknowledge the tariff reductions are funded by taxpayers' money.

Koo said the ministry discussed the capital outflows of dollars and the ensuing suppression of the won with corporations and requested that they recognize the support they are receiving from the tariff rate cuts.

“The government is using taxpayers' money to invest in the United States, which lowers our tariffs, allowing companies to benefit,” Koo said.

BY JIN MIN-JI [[email protected]]