South Korea will designate high bandwidth memory (HBM), the technology incorporated into artificial intelligence (AI) chips, as a national strategic technology and will give tax benefits to developers of the technology such as Samsung Electronics Co. and SK hynix Inc.
The designation was part of a draft enforcement decree following the tax law amendment announced by the Ministry of Economy and Finance announcement on Tuesday. The tax law amendment passed the National Assembly at the end of 2023.
Key changes include the expansion of the scope of national strategic technology eligible for tax benefits for investment in research and development. Companies receive higher tax deductions for their designated national strategic technologies compared to general R&D activities. Small and medium-sized enterprises are eligible for a deduction of up to 40 to 50 percent, while middle-market and large corporates get a deduction of up to 30 to 40 percent.