South Korean Government to Continue to Put in Efforts to Make Materials, Components, and Equipment Industries More Advanced

Oct 31, 2019

As enhancement of materials, components, and equipment has emerged as a key issue for South Korean industries ever since Japanese Government enforced its regulation on key semiconductor and display materials, South Korean Government and relevant agencies have been busy with making necessary preparations and adjustments. Development of key materials, components, and equipment through R&D support and creation of industrial ecosystems are some of major tasks for South Korean Government. Korea Institute for Advancement of Technology (KIAT), which provides R&D support for industrial technology, is also expanding its R&D support for key materials, components, and equipment and projects for building infrastructures next year. It is also continuing its ‘voucher’ project for companies in materials, components, and equipment industries so that technology development can lead to mass-production. Also, it is going to establish R&D system for entire cycles of technical innovation through comprehensive support systems such as financial support and tax support in order to quickly secure core technologies related to materials, components, and equipment.
◊KIAT to expand its services for platforms and cultivation of manpower in 2020
KIAT is planning to expand R&D support system that provides support for entire cycles of technical innovation from development to commercialization. Through computer simulations, it is going to provide support for quick commercialization of convergent materials, composites, convergent components, and mixed components and it is also going to accelerate the process of cultivating professionals. It is going to maintain its voucher support in order to increase the credibility of technologies and products.
Next year’s virtual engineering platform project will be the biggest ever. Next year’s estimated budget for the project will be $23.1 million (27 billion KRW) that is more than twice than this year’s budget at $9.33 million (10.9 billion KRW). Purpose of the project is to reduce the cost and the commercialization period of convergent materials, composites, convergent components, and mixed components through computer simulation. This project allows making of a virtual model, process, design, and simulation to be implemented from a platform. KIAT is planning to finish establishing virtual engineering platforms for metal, chemistry, fiber, ceramic, and machinery.
KIAT is also planning to expand its project for enhancing abilities of professionals next year. Next year’s budget is estimated to be $75.8 million (88.5 billion KRW) that is $2.91 million (3.4 billion KRW) more than that of this year. KIAT has increased its support to train individuals in next-generation materials, components, and equipment fields such as intelligent semiconductor, display, and high-value metallic material. It has also increased its benefit for supplementing personnel expenses when a company hires research personnel from natural sciences and engineering fields and it covers 50% of an annual income up to 3 years.
KIAT is also going to maintain ‘Reliability-Based Utilization Project’ that allows companies to receive services from any public research institute to improve reliability and to demonstrate their technologies. This project first provides a voucher to companies from the industries of materials and components. Companies then purchase services from supporting agencies just like cash. Number of companies that had utilized this project increased from 192 in 2017 to 288 and 381 in 2018 and 2019 respectively. The project ties development and mass-production stages so that technologies do not go to waste right before they are commercialized.
“Although we provide many services where we actually provide funds, we also provide many services where we provide vouchers or platforms that can be used by small and medium companies.” said a spokesperson for KIAT. “We are going to help small and medium companies with hiring qualified individuals by training professionals.”
◊KIAT Plans to Provide More Tax and Financial Benefits
KIAT is going to continue to provide support through ‘Buy R&D service’ based on tax benefits or financial support. Through ‘Buy R&D service’, a company can secure a core technology in a short period of time by adopting technologies from the outside in order to quickly respond to changes in global value chain (GVC). It especially helps companies to effectively secure technologies related to materials, components, and equipment that require a long R&D period in a short period of time.
To induce corporate investments related to materials, components, and equipment, KIAT is planning to expand the range of tax exemption benefit from materials and components towards equipment in 2020. When the revision of Enforcement Decree of Tax Reduction and Exemption Control Act is enforced at the end of this year, major companies and medium-sized companies (up to 40% of medium-sized companies listed on KOSDAQ) and small and medium companies can receive up to 30% and 40% of corporate tax exemption on their R&D costs respectively. Corporate tax exemption rates for investment in facilities and equipment will be 5%, 7%, and 10% for major companies, medium-sized companies, and small and medium companies respectively. It is likely that more companies will benefit from this exemption once the enforcement decree is enforced at the end of this year.
KIAT is planning to push for a new project that will resolve any difficulty through collaboration between major buyers and suppliers and localize key materials, components, and equipment early in 2020. Whenever small and medium companies or medium-sized companies develop a technology, major companies will participate as buyers and develop and evaluate the corresponding technology together.
Besides this, KIAT is also going to match medium-sized companies in materials and components industries with government-funded research institutes. Medium-sized companies will be matched with public research institutes based on their current technologies and they will look for opportunities to localize and perform R&D on key materials and components together. KIAT is also planning to make ‘Tech Day’, where companies provide consultation technology cooperation, a regular meeting starting from the next year.
“We have to acknowledge the importance of ‘teamplay’ if our materials, components, and equipment industries are to be solidified and not swayed by changes in GVC.” said Director Seok Young-cheol of KIAT. “We are going to make efforts so that a symbiotic culture is established within industries and research industry and suppliers and buyers.”
Staff Reporter Byun, Sanggeun | sgbyun@etnews.com

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