South Korea, Italy seek synergies in AI and semiconductors, discuss trade environment

South Korea and Italy agreed to further strengthen their strategic partnership in industry and trade, using President Lee Jae Myung's visit to Italy as an opportunity. The two countries also agreed to cooperate on reinforcing the industrial ecosystems of their businesses and improving predictability in EU economic legislative processes.

Minister of Trade, Industry and Energy Kim Jung-kwan met with Italian Minister of Enterprises and Made in Italy Adolfo Urso on Thursday to discuss key bilateral issues.

According to the Ministry of Trade, Industry and Energy, the two sides exchanged views on recent major EU economic legislative developments and measures to stabilize the trade environment for businesses.

South Korea expressed appreciation for Italy's recent decision to remove geographic restrictions on its super-depreciation regime. The system allows Italian companies to deduct costs higher than the actual purchase price of new equipment from their taxable income, reducing their corporate tax burden; Italy had previously limited the benefit to tangible and intangible assets of EU origin.

The two sides also agreed that Korean machinery and equipment enhance the productivity and global competitiveness of Italian small and medium-sized manufacturers, and that close bilateral cooperation on future strategic industries should be promoted.

They agreed to continue government-to-government cooperation in future EU legislative processes to strengthen both countries' industrial ecosystems and improve predictability.

In advanced industries, the two ministers discussed areas of complementary cooperation centered on AI and semiconductors.

South Korea introduced its Manufacturing AI Transformation (M.AX) policy, emphasizing its potential to create synergies with Italy's traditional manufacturing base. Italy expressed interest in cooperating with South Korea in the memory chip and foundry sectors, drawing on its strengths in semiconductor materials, equipment and advanced packaging.

The two sides also agreed to continue reviewing ways to cooperate on building stable supply chains for critical minerals.

The Ministry of Trade, Industry and Energy said the meeting gave both countries an opportunity to share tangible progress on improving the trade environment and to jointly address common industrial challenges in manufacturing AI transformation and semiconductor supply chains.

"This discussion carries great significance in that it went beyond coordination on individual issues to broaden the overall scope of both countries' industries and to pursue a shared future vision and survival strategy amid a sweeping transformation of the global industrial paradigm," Kim said.

He added that the two countries would "continue to develop a partnership that can fully realize cooperative synergies on the global stage, with improvements to the EU trade environment and advanced industry cooperation as the two pillars going forward."