Korea to launch $23 bn high tech fund, bracing for Trump 2.0

South Korea will launch a high tech fund worth more than 34 trillion won ($23 billion) to provide cheap financing, including equity investments, for battery and biotech companies, as well as other advanced technology developers, according to the Ministry of Economy and Finance on Wednesday.

The new fund addresses South Korea’s concerns about the negative impact of Donald Trump’s nationalist policies in his second term and the January launch of China’s generative AI DeepSeek that stunned the world.

"The fund will raise more than double the amount of the semiconductor financing support program (17 trillion won) and provide support in various forms, including low interest loans and equity investments," said Acting President and Minister of Economy and Finance Choi Sang-mok before a ministerial meeting.

Currently, the government is running a financing support program worth 17 trillion won dedicated to the semiconductor industry.

The fund, tentatively named the Advanced Technology Industrial Fund, will be managed by the Korea Development Bank (KDB), Choi added. It will also cover small and medium-sized parts and raw materials producers of advanced industries.

Details about the fund will be finalized with an amendment to the relevant law, which the government plans to discuss with the National Assembly in March.

Choi warned that global uncertainties such as Washington’s tariffs under the Trump administration are mounting, describing DeepSeek as a "fresh shock."

He made the remarks before presiding over a meeting with relevant ministers to discuss political issues and measures to boost the country’s industrial competitiveness.

Trump's trade policies could have both pros and cons for South Korea. The finance ministry expects Washington’s heavy tariffs on Chinese batteries, if imposed, to enhance the price competitiveness of South Korean battery manufacturers and allow them to emerge as key players in the global supply chain.  

However, Korean carmakers are expected to suffer from higher US tariffs as the country accounts for more than half their exports.

Write to Yeonhee Kim at yhkim@hankyung.com

Jennifer Nicholson-Breen edited this article.