The ruling party of South Korea has proposed establishing a domestic CHIPS Act to mitigate the potential risks from the tariffs President-elect Trump has been threatening to impose.

According to a report from the Korea Times, South Korean President Yoon Suk Yeol is concerned that if Trump places steep tariffs on Chinese imports, other countries could slash export prices and undercut Korean chip firms.

The country already significantly supports its chips sector. In 2021, the country said that it would spend $451 billion on domestic semiconductor production over the next decade, through a mixture of government support packages, tax incentives, and corporate investment pledges.

In comments reported by the news outlet, representative Lee Chul-gyu said the bill would help Korean companies fend off challenges from the likes of China, Japan, Taiwan, and the US.

If approved, the proposed act would provide semiconductor companies with subsidies, akin to the US CHIPS and Science Act, and exempt employees involved in research and development from the national cap on working hours which sits at 52 hours a week.

However, the latter suggestion has been opposed by the National Samsung Electronics Union (NSEU), which said Samsung Electronics has already been trying to blame the law for issues that are instead the result of management failure.

Over the summer, multiple strikes were carried out by workers at Samsung Electronics’ facilities in South Korea, where employees were demanding a wage increase, in addition to improvements to the company’s performance-based bonus system.

South Korea is home to the two largest memory chipmakers in the world, SK Hynix and Samsung Electronics. Both are also amongst the top ten biggest semiconductor companies globally, and Samsung is one of only two manufacturers, along with Taiwan's TSMC, capable of producing leading-edge CPUs and GPUs.

According to the Korea Times, chips made up 16 percent of total exports for South Korea in 2023.