Signal Korea launches IRA-style production tax credit covering chips, batteries and AI robots

Summary

The South Korean government selected six strategic product categories — including semiconductors, batteries and AI robots — as the first targets for a new production-linked tax credit modeled on the US Inflation Reduction Act (IRA). The policy is characterized as a significant industrial-policy shift aimed at protecting and strengthening domestic supply chains amid competing onshoring and subsidy policies from the US, Japan and other major economies. The scheme is designed to allow direct-pay subsidies even for loss-making companies that cannot benefit from standard tax credits, extending support to firms without current tax liability. The program ties credits directly to production volume, mirroring elements of the US IRA's clean-energy and semiconductor manufacturing incentive design.