Korea has secured the law. But the money? No, not yet. And for a country positioning semiconductor at the center of its AI-era strategy, the sequencing actually matters. The National Assembly’s passage of the Semiconductor Special Act signals policy intent. Yet the KRW 2 trillion special account designed to power that intent will not operate until 2027, introducing a one-year gap between declaration and dedicated capital deployment.

Korea Semiconductor Special Act 2026 Approved, Special Account Delayed

On January 29, the National Assembly passed the “Special Act on Strengthening and Supporting the Competitiveness of the Semiconductor Industry” during its plenary session. The bill cleared with 199 votes in favor and 7 abstentions out of 206 members present.

The Act provides the legal basis for designating semiconductor clusters and supporting infrastructure development, including expansion of power, water supply, road networks, and administrative assistance such as expedited approvals and special exemptions from preliminary feasibility studies.

Industry groups welcomed the move. The Korea Semiconductor Industry Association described the legislation as “an important turning point” and “a starting point for elevating semiconductor competitiveness in the AI era.” Business organizations emphasized that national-level infrastructure support and regulatory improvements would help reduce investment uncertainty and strengthen global competitiveness.

However, according to relevant ministries, the KRW 2 trillion Semiconductor Special Account—intended as the Act’s dedicated funding mechanism—will not be established until next year

Because the necessary amendment to the National Finance Act was not processed alongside the 2026 budget deliberations, the special account is expected to begin operating in 2027. In 2026, semiconductor support will continue through dispersed general accounts across ministries.

Meanwhile, the contentious proposal to exempt semiconductor R&D personnel from the 52-hour workweek limit was not included in the final legislation.

Why South Korea Semiconductor Industry Policy 2026 Signals a Structural Shift

The Act formalizes what has been unfolding for several years: semiconductors are no longer treated as an industrial segment but as strategic infrastructure.

And the bill involves specific language: industry associations repeatedly framed competitiveness through the lens of artificial intelligence, noting that AI semiconductor capabilities are emerging as decisive factors in national strength. Governments worldwide, they said, are implementing aggressive support measures to secure leadership in advanced chips.

What changes here is institutional posture. The Korean government now has a clear legal mandate to prioritize semiconductor clusters and coordinate fiscal and administrative support. For large-scale projects—especially those requiring coordinated power and water access—legal clarity reduces long-term uncertainty.

For the global ecosystem, this confirms that South Korea’s semiconductor push is not episodic. It is embedded in national policy architecture.

Yet architecture and liquidity are not the same thing.

The ₩2 Trillion Semiconductor Special Account Delay Exposes an Execution Gap

The most consequential detail in this development is not the bill’s passage but its funding timeline.

The dedicated KRW 2 trillion semiconductor special account will only begin operating in 2027, contingent on the passage of the National Finance Act amendment alongside next year’s budget. Until then, support remains fragmented within general accounts.

This sequencing matters because dedicated accounts signal sustained, ring-fenced commitment. General accounts, by contrast, compete with other policy priorities.

The omission of the 52-hour workweek exemption for R&D personnel adds another layer of tension. Industry groups had argued that labor flexibility was critical in a fast-moving AI semiconductor race. Its exclusion reflects unresolved domestic policy friction.

None of this invalidates the Act. But it complicates the narrative of immediate acceleration. Ambition has been legislated, but tangible execution will depend on fiscal alignment and institutional follow-through.

Korea Semiconductor Cluster Infrastructure Support: What This Enables — and What It Still Does Not

Additionally, the Act strengthens the foundation for semiconductor cluster expansion. Infrastructure coordination—electricity, water, roads, administrative approvals—has historically been a bottleneck in advanced manufacturing. Legal prioritization may reduce delays and signal long-term state backing.

At the same time, large-scale memory producers and foundry operators are the most direct beneficiaries of infrastructure certainty. Advanced packaging and system semiconductor players positioned within clusters may also gain from ecosystem density.

Still, what the law does not immediately provide is the new venture-stage capital. It does not establish a startup-focused semiconductor fund. It does not introduce direct subsidy mechanisms in its current form. It does not alter labor regulations for R&D engineers.

For early-stage fabless startups and semiconductor design ventures, the act actually causes indirect impact. Cluster strength may improve supplier access and ecosystem stability over time. It does not, by itself, solve capital constraints or market access challenges.

This is industrial policy first, startup policy second.

Impact of Korea Semiconductor Special Act on Startups and Global Investors

So, for global founders and investors evaluating Korea, three signals emerge.

First, semiconductors remain central to national strategy. Policy continuity is evident across administrations and industry cycles. That reduces long-term geopolitical ambiguity.

Second, the funding gap until 2027 introduces a near-term pacing issue. International partners expecting immediate fiscal acceleration should calibrate expectations.

Third, the unresolved 52-hour workweek debate highlights a deeper policy balancing act: national competitiveness versus domestic labor standards. That tension is not unique to Korea, but it shapes operational reality.

Cross-border investors in AI hardware, advanced memory, or semiconductor equipment should read this development as institutional consolidation, not instant liquidity expansion. The ecosystem is stabilizing around infrastructure. Capital intensity remains high. Policy execution will determine whether legal intent translates into market leverage.

Strategic Closing: Policy Passed, Capacity Pending

Finally, South Korea has chosen its direction. The question now is timing.

A Semiconductor Special Act without its dedicated special account operating until 2027 creates a transitional year in which ambition runs slightly ahead of fiscal structure. That gap may prove temporary. Or it may reveal the difficulty of aligning industrial urgency with legislative process.

In the AI semiconductor race, sequencing often decides advantage.

Key Takeaway on Korea’s Semiconductor Special Act 2026

• The Korea Semiconductor Special Act 2026 has passed, establishing legal backing for semiconductor cluster and infrastructure support.
• The KRW 2 trillion semiconductor special account will not begin operating until 2027 due to pending National Finance Act amendments.
• The 52-hour workweek exemption for semiconductor R&D was excluded from the final legislation.
• 2026 semiconductor support will rely on dispersed general accounts rather than a dedicated funding mechanism.
• The law strengthens long-term industrial infrastructure but does not introduce immediate startup-focused capital.
• For global stakeholders, the development signals strategic continuity—tempered by short-term execution gaps.

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