Total Amount of R&D’s New Budget for Semiconductor and Display Is Cut

Total amount of next year’s national budget for semiconductor and display’s R&D on new businesses is cut and this is totally opposite of Chinese businesses receiving support from Chinese Government and even speeding up processes of global M&A.

Chinese semiconductor and display businesses are rising up very rapidly.

According to 2016’s government budget that was decided by National Assembly’s Budget and Accounting Committee on the 14th, final budget for ‘Electronic Information Device Industrial Original Technology Development Business’ is cut and set at $45.6 million (54 billion KRW). Although industries were expecting increase of budget, Budget and Accounting Committee even cut $7.24 million (8.6 billion KRW) that was increased due to settlement between National Assembly’s committees.

Budgets for this field’s R&D reached $112 million (132.6 billion KRW) and $106 million (125.6 billion KRW) in 2012 and 2013 respectively. However budgets were decreased to $90.5 million (107.3 billion KRW) and $80.3 million (95.2 billion KRW) in 2014 and 2015 respectively after President Park Gun-hye was appointed. Budget for 2016 was reduced by half at $46.3 million (54.9 billion KRW). Out of overall budget, budget for semiconductor is decreased from $47.3 million (56.1 billion KRW) to $30 million (35.6 billion KRW) in 2016, and budget for display is decreased from $16.4 million (19.5 billion KRW) in 2015 to $7.84 million (9.3 billion KRW) in 2016. Budget for LED and optics fields is decreased from $14.9 million (17.7 billion KRW) in 2015 to $7.59 million (9 billion KRW).

Electronics Information Device Business has been pushed as a business that continues development of national major technologies in semiconductor, display, and LED fields since 2009. Confusion regarding process of securing budget occurred as semiconductor display R&D is remained in industry department and as information promotion fund is transferred to Ministry of Science, ICP and Future Planning (MSIP) due to reorganization of government group in 2013.

Since this year, movements to reduce budget in semiconductor and display industries from information promotion fund have been detected. There were controversies regarding use of information promotion fund after reorganization of government group, and it had been concluded as to reduce support sequentially since this year.

Reduction of budget for R&D was once issued as a controversy in National Assembly. National Assembly’s Trade, Industry & Energy Committee officially proposed about reexamination of next year’s budget plan for information communication promotion fund to MSIP’s Korea Communications Commission and they settled on adding $7.24 million (8.6 billion KRW) that was reduced from current businesses. However final budget amount was decided at $46.3 million (54.9 billion KRW) because National Assembly’s Budget and Accounting Committee did not accept a settlement.

Industry, university and institutes for semiconductor and display fields worried about reduction of manpower from university’s research. Criticisms on making industrial competitiveness of semiconductor and display fields still dependent on individual huge corporate were also brought up. Although semiconductor and display businesses plea for lack of manpower, they censure that South Korean Government that should be supporting for growth of manpower for long-term is looking the other way.

“While China is increasing competitiveness in semiconductor, display and LED industries from a national perspective, South Korean Government does not feel the need to promote manpower and development of technologies.” said a person from this industry. “Lack of interest from South Korean Government has provided reasons for Chinese businesses to fiercely chase after South Korean businesses.”

China started investing into Gen 10.5 LCD before South Korea. Semiconductor businesses that have support from Chinese Government are currently buying major American semiconductor businesses such as Fairchild and others.

Staff Reporter Bae, Okjin | [email protected]