The semiconductor sector holds significant importance for South Korea's trade-driven economy, which ranks fourth in Asia. Notably, chips accounted for 16% of the country's total exports in the previous year.
Recently, President Yoon Suk Yeol expressed concerns regarding the risks associated with Trump's proposed steep tariffs on Chinese imports, which could lead Chinese competitors to lower their export prices, thereby undermining Korean chip manufacturers in international markets.
The proposed legislation requires approval from the main opposition party to move forward and comes at a time when companies like Samsung Electronics are preparing for intensified competition from rivals in China, Taiwan, and other regions.
According to lawmaker Lee Chul-gyu, one of the bill's sponsors, the legislation will assist Korean firms in navigating challenges as countries like China, Japan, Taiwan, and the United States offer subsidies to their manufacturers amid an ongoing semiconductor trade conflict between China and the U.S.
The bill also includes provisions allowing certain research and development employees to work beyond the current labor law limit of 52 hours per week.
This month, Samsung's labor union expressed opposition to this proposal, arguing that the company was attempting to shift responsibility for its "management failure" onto the law.
Last month, Samsung issued an apology for its disappointing profits, as it has fallen behind competitors TSMC and SK Hynix in capitalizing on the surging demand for artificial intelligence chips, amid increasing competition from Chinese firms.
In October, Trump threatened to eliminate federal chip subsidies for companies like Taiwan's TSMC, South Korea's Samsung, and SK Hynix, favoring instead the imposition of import tariffs.